Correlation Between Olav Thon and American Shipping
Can any of the company-specific risk be diversified away by investing in both Olav Thon and American Shipping 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 Olav Thon and American Shipping into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Olav Thon Eien and American Shipping, you can compare the effects of market volatilities on Olav Thon and American Shipping 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 Olav Thon with a short position of American Shipping. Check out your portfolio center. Please also check ongoing floating volatility patterns of Olav Thon and American Shipping.
Diversification Opportunities for Olav Thon and American Shipping
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Olav and American is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Olav Thon Eien and American Shipping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Shipping and Olav Thon 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 Olav Thon Eien are associated (or correlated) with American Shipping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Shipping has no effect on the direction of Olav Thon i.e., Olav Thon and American Shipping go up and down completely randomly.
Pair Corralation between Olav Thon and American Shipping
Assuming the 90 days trading horizon Olav Thon Eien is expected to generate 0.41 times more return on investment than American Shipping. However, Olav Thon Eien is 2.42 times less risky than American Shipping. It trades about 0.0 of its potential returns per unit of risk. American Shipping is currently generating about -0.05 per unit of risk. If you would invest 22,600 in Olav Thon Eien on September 24, 2024 and sell it today you would lose (100.00) from holding Olav Thon Eien or give up 0.44% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Olav Thon Eien vs. American Shipping
Performance |
Timeline |
Olav Thon Eien |
American Shipping |
Olav Thon and American Shipping Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Olav Thon and American Shipping
The main advantage of trading using opposite Olav Thon and American Shipping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Olav Thon position performs unexpectedly, American Shipping 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 American Shipping will offset losses from the drop in American Shipping's long position.Olav Thon vs. Gjensidige Forsikring ASA | Olav Thon vs. Storebrand ASA | Olav Thon vs. DnB ASA | Olav Thon vs. Veidekke ASA |
American Shipping vs. Frontline | American Shipping vs. BW LPG | American Shipping vs. FLEX LNG | American Shipping vs. Dampskibsselskabet Norden AS |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |