Correlation Between Aker Carbon and Puration

Can any of the company-specific risk be diversified away by investing in both Aker Carbon and Puration at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Aker Carbon and Puration into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aker Carbon Capture and Puration, you can compare the effects of market volatilities on Aker Carbon and Puration and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Aker Carbon with a short position of Puration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aker Carbon and Puration.

Diversification Opportunities for Aker Carbon and Puration

0.0

Correlation Coefficient

Aker Carbon  Puration

Pay attention - limited upside

The 3 months correlation between Aker and Puration is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aker Carbon Capture and Puration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Puration and Aker Carbon is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Aker Carbon Capture are associated (or correlated) with Puration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Puration has no effect on the direction of Aker Carbon i.e., Aker Carbon and Puration go up and down completely randomly.

Pair Corralation between Aker Carbon and Puration

Assuming the 90 days horizon Aker Carbon Capture is expected to under-perform the Puration. But the pink sheet apears to be less risky and, when comparing its historical volatility, Aker Carbon Capture is 2.8 times less risky than Puration. The pink sheet trades about -0.01 of its potential returns per unit of risk. The Puration is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  0.10  in Puration on September 27, 2024 and sell it today you would lose (0.10) from holding Puration or give up 100.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.6%
Values	Daily Returns

Aker Carbon Capture  vs.  Puration

Aker Carbon Capture

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aker Carbon Capture has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Aker Carbon is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Puration

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Puration has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Puration is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Aker Carbon and Puration

The main advantage of trading using opposite Aker Carbon and Puration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aker Carbon position performs unexpectedly, Puration can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Puration will offset losses from the drop in Puration's long position.

The idea behind Aker Carbon Capture and Puration pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.