Correlation Between Holand Og and Akva

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

By analyzing existing cross correlation between Holand og Setskog and Akva Group, you can compare the effects of market volatilities on Holand Og 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 Holand Og with a short position of Akva. Check out your portfolio center. Please also check ongoing floating volatility patterns of Holand Og and Akva.

Diversification Opportunities for Holand Og and Akva

0.76

Correlation Coefficient

Holand Og  Akva

Poor diversification

The 3 months correlation between Holand and Akva is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Holand og Setskog and Akva Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akva Group and Holand Og 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 Holand og Setskog 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 Holand Og i.e., Holand Og and Akva go up and down completely randomly.

Pair Corralation between Holand Og and Akva

Assuming the 90 days trading horizon Holand og Setskog is expected to generate 3.32 times more return on investment than Akva. However, Holand Og is 3.32 times more volatile than Akva Group. It trades about -0.03 of its potential returns per unit of risk. Akva Group is currently generating about -0.19 per unit of risk. If you would invest  13,600  in Holand og Setskog on September 26, 2024 and sell it today you would lose (450.00) from holding Holand og Setskog or give up 3.31% of portfolio value over 90 days.

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

Holand og Setskog  vs.  Akva Group

Holand og Setskog

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Holand og Setskog are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting essential indicators, Holand Og may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Akva Group

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Akva Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting essential indicators, Akva disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Holand Og and Akva

The main advantage of trading using opposite Holand Og and Akva positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Holand Og 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.

The idea behind Holand og Setskog and Akva Group 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.