Correlation Between Aker Horizons and Pexip Holding

Can any of the company-specific risk be diversified away by investing in both Aker Horizons and Pexip Holding 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 Horizons and Pexip Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aker Horizons AS and Pexip Holding ASA, you can compare the effects of market volatilities on Aker Horizons and Pexip Holding 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 Horizons with a short position of Pexip Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aker Horizons and Pexip Holding.

Diversification Opportunities for Aker Horizons and Pexip Holding

-0.67

Correlation Coefficient

Aker Horizons  Pexip Holding

Excellent diversification

The 3 months correlation between Aker and Pexip is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Aker Horizons AS and Pexip Holding ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pexip Holding ASA and Aker Horizons 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 Horizons AS are associated (or correlated) with Pexip Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pexip Holding ASA has no effect on the direction of Aker Horizons i.e., Aker Horizons and Pexip Holding go up and down completely randomly.

Pair Corralation between Aker Horizons and Pexip Holding

Assuming the 90 days trading horizon Aker Horizons AS is expected to under-perform the Pexip Holding. In addition to that, Aker Horizons is 2.26 times more volatile than Pexip Holding ASA. It trades about -0.03 of its total potential returns per unit of risk. Pexip Holding ASA is currently generating about 0.21 per unit of volatility. If you would invest  3,670  in Pexip Holding ASA on September 17, 2024 and sell it today you would earn a total of  930.00  from holding Pexip Holding ASA or generate 25.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Aker Horizons AS  vs.  Pexip Holding ASA

Aker Horizons AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aker Horizons AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's technical indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pexip Holding ASA

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pexip Holding ASA are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Pexip Holding displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aker Horizons and Pexip Holding

The main advantage of trading using opposite Aker Horizons and Pexip Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aker Horizons position performs unexpectedly, Pexip Holding 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 Pexip Holding will offset losses from the drop in Pexip Holding's long position.

The idea behind Aker Horizons AS and Pexip Holding ASA 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.

Check out your portfolio center.

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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.