Correlation Between Atea ASA and Crayon Group

Can any of the company-specific risk be diversified away by investing in both Atea ASA and Crayon Group 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 Atea ASA and Crayon Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Atea ASA and Crayon Group

0.3

Correlation Coefficient

Atea ASA  Crayon Group

Weak diversification

The 3 months correlation between Atea and Crayon is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Atea ASA and Crayon Group Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crayon Group Holding and Atea ASA 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 Atea ASA are associated (or correlated) with Crayon Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crayon Group Holding has no effect on the direction of Atea ASA i.e., Atea ASA and Crayon Group go up and down completely randomly.

Pair Corralation between Atea ASA and Crayon Group

Assuming the 90 days trading horizon Atea ASA is expected to generate 9.86 times less return on investment than Crayon Group. But when comparing it to its historical volatility, Atea ASA is 1.73 times less risky than Crayon Group. It trades about 0.01 of its potential returns per unit of risk. Crayon Group Holding is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  11,190  in Crayon Group Holding on September 13, 2024 and sell it today you would earn a total of  1,510  from holding Crayon Group Holding or generate 13.49% return on investment over 90 days.

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

Atea ASA  vs.  Crayon Group Holding

Atea ASA

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Atea ASA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent essential indicators, Atea ASA is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Crayon Group Holding

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Crayon Group Holding are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Crayon Group displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Atea ASA and Crayon Group

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

The idea behind Atea ASA and Crayon Group Holding 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.