Correlation Between Veidekke ASA and Odfjell SE
Can any of the company-specific risk be diversified away by investing in both Veidekke ASA and Odfjell SE 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 Veidekke ASA and Odfjell SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Veidekke ASA and Odfjell SE, you can compare the effects of market volatilities on Veidekke ASA and Odfjell SE 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 Veidekke ASA with a short position of Odfjell SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Veidekke ASA and Odfjell SE.
Diversification Opportunities for Veidekke ASA and Odfjell SE
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Veidekke and Odfjell is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Veidekke ASA and Odfjell SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Odfjell SE and Veidekke 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 Veidekke ASA are associated (or correlated) with Odfjell SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Odfjell SE has no effect on the direction of Veidekke ASA i.e., Veidekke ASA and Odfjell SE go up and down completely randomly.
Pair Corralation between Veidekke ASA and Odfjell SE
Assuming the 90 days trading horizon Veidekke ASA is expected to generate 0.44 times more return on investment than Odfjell SE. However, Veidekke ASA is 2.3 times less risky than Odfjell SE. It trades about 0.17 of its potential returns per unit of risk. Odfjell SE is currently generating about -0.07 per unit of risk. If you would invest 13,640 in Veidekke ASA on September 25, 2024 and sell it today you would earn a total of 460.00 from holding Veidekke ASA or generate 3.37% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 95.45% |
Values | Daily Returns |
Veidekke ASA vs. Odfjell SE
Performance |
Timeline |
Veidekke ASA |
Odfjell SE |
Veidekke ASA and Odfjell SE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Veidekke ASA and Odfjell SE
The main advantage of trading using opposite Veidekke ASA and Odfjell SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Veidekke ASA position performs unexpectedly, Odfjell SE 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 Odfjell SE will offset losses from the drop in Odfjell SE's long position.Veidekke ASA vs. DnB ASA | Veidekke ASA vs. Orkla ASA | Veidekke ASA vs. Storebrand ASA | Veidekke ASA vs. Yara International ASA |
Odfjell SE vs. Stolt Nielsen Limited | Odfjell SE vs. Odfjell B | Odfjell SE vs. Wilh Wilhelmsen Holding | Odfjell SE vs. Frontline |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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