Correlation Between Elektroimportoren and Scana ASA

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

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

Diversification Opportunities for Elektroimportoren and Scana ASA

-0.57

Correlation Coefficient

Elektroimportoren  Scana ASA

Excellent diversification

The 3 months correlation between Elektroimportoren and Scana is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Elektroimportoren As and Scana ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scana ASA and Elektroimportoren 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 Elektroimportoren As are associated (or correlated) with Scana ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scana ASA has no effect on the direction of Elektroimportoren i.e., Elektroimportoren and Scana ASA go up and down completely randomly.

Pair Corralation between Elektroimportoren and Scana ASA

Assuming the 90 days trading horizon Elektroimportoren As is expected to generate 0.97 times more return on investment than Scana ASA. However, Elektroimportoren As is 1.03 times less risky than Scana ASA. It trades about 0.18 of its potential returns per unit of risk. Scana ASA is currently generating about 0.01 per unit of risk. If you would invest  910.00  in Elektroimportoren As on August 30, 2024 and sell it today you would earn a total of  350.00  from holding Elektroimportoren As or generate 38.46% return on investment over 90 days.

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

Elektroimportoren As  vs.  Scana ASA

Elektroimportoren

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Elektroimportoren As are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Elektroimportoren displayed solid returns over the last few months and may actually be approaching a breakup point.

Scana ASA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Scana ASA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Scana ASA is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Elektroimportoren and Scana ASA

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

The idea behind Elektroimportoren As and Scana 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.