Correlation Between Vow ASA and SKAGEN AVKASTNING

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

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

Diversification Opportunities for Vow ASA and SKAGEN AVKASTNING

-0.75

Correlation Coefficient

Vow ASA  SKAGEN AVKASTNING

Pay attention - limited upside

The 3 months correlation between Vow and SKAGEN is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Vow ASA and SKAGEN AVKASTNING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SKAGEN AVKASTNING and Vow 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 Vow ASA are associated (or correlated) with SKAGEN AVKASTNING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SKAGEN AVKASTNING has no effect on the direction of Vow ASA i.e., Vow ASA and SKAGEN AVKASTNING go up and down completely randomly.

Pair Corralation between Vow ASA and SKAGEN AVKASTNING

Assuming the 90 days trading horizon Vow ASA is expected to under-perform the SKAGEN AVKASTNING. In addition to that, Vow ASA is 647.78 times more volatile than SKAGEN AVKASTNING. It trades about -0.05 of its total potential returns per unit of risk. SKAGEN AVKASTNING is currently generating about 1.59 per unit of volatility. If you would invest  14,830  in SKAGEN AVKASTNING on September 18, 2024 and sell it today you would earn a total of  79.00  from holding SKAGEN AVKASTNING or generate 0.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Vow ASA  vs.  SKAGEN AVKASTNING

Vow ASA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vow ASA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Vow ASA is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

SKAGEN AVKASTNING

Risk-Adjusted Performance

88 of 100

Market Crasher

Compared to the overall equity markets, risk-adjusted returns on investments in SKAGEN AVKASTNING are ranked lower than 88 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong basic indicators, SKAGEN AVKASTNING is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Vow ASA and SKAGEN AVKASTNING

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

The idea behind Vow ASA and SKAGEN AVKASTNING 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.