Correlation Between Aker Solutions and Akva
Can any of the company-specific risk be diversified away by investing in both Aker Solutions and Akva 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 Solutions and Akva into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aker Solutions ASA and Akva Group, you can compare the effects of market volatilities on Aker Solutions and Akva 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 Solutions with a short position of Akva. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aker Solutions and Akva.
Diversification Opportunities for Aker Solutions and Akva
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Aker and Akva is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Aker Solutions ASA and Akva Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akva Group and Aker Solutions 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 Solutions ASA are associated (or correlated) with Akva. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akva Group has no effect on the direction of Aker Solutions i.e., Aker Solutions and Akva go up and down completely randomly.
Pair Corralation between Aker Solutions and Akva
Assuming the 90 days trading horizon Aker Solutions ASA is expected to generate 1.43 times more return on investment than Akva. However, Aker Solutions is 1.43 times more volatile than Akva Group. It trades about 0.18 of its potential returns per unit of risk. Akva Group is currently generating about 0.13 per unit of risk. If you would invest 2,287 in Aker Solutions ASA on September 26, 2024 and sell it today you would earn a total of 813.00 from holding Aker Solutions ASA or generate 35.55% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Aker Solutions ASA vs. Akva Group
Performance |
Timeline |
Aker Solutions ASA |
Akva Group |
Aker Solutions and Akva Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Aker Solutions and Akva
The main advantage of trading using opposite Aker Solutions and Akva positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aker Solutions position performs unexpectedly, Akva 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 Akva will offset losses from the drop in Akva's long position.Aker Solutions vs. Subsea 7 SA | Aker Solutions vs. Aker ASA | Aker Solutions vs. Dno ASA | Aker Solutions vs. Aker Carbon Capture |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
Bonds Directory Find actively traded corporate debentures issued by US companies | |
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |