Correlation Between Aega ASA and Arcticzymes Technologies

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

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

Diversification Opportunities for Aega ASA and Arcticzymes Technologies

0.61

Correlation Coefficient

Aega ASA  Arcticzymes Technologies

Poor diversification

The 3 months correlation between Aega and Arcticzymes is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Aega ASA and Arcticzymes Technologies ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arcticzymes Technologies and Aega 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 Aega ASA are associated (or correlated) with Arcticzymes Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arcticzymes Technologies has no effect on the direction of Aega ASA i.e., Aega ASA and Arcticzymes Technologies go up and down completely randomly.

Pair Corralation between Aega ASA and Arcticzymes Technologies

Assuming the 90 days trading horizon Aega ASA is expected to generate 1.61 times more return on investment than Arcticzymes Technologies. However, Aega ASA is 1.61 times more volatile than Arcticzymes Technologies ASA. It trades about 0.0 of its potential returns per unit of risk. Arcticzymes Technologies ASA is currently generating about -0.24 per unit of risk. If you would invest  197.00  in Aega ASA on February 1, 2024 and sell it today you would lose (2.00) from holding Aega ASA or give up 1.02% of portfolio value over 90 days.

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

Aega ASA  vs.  Arcticzymes Technologies ASA

Aega ASA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aega ASA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in June 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Arcticzymes Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Arcticzymes Technologies ASA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in June 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Aega ASA and Arcticzymes Technologies

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

The idea behind Aega ASA and Arcticzymes Technologies 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.

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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.