Correlation Between American Shipping and Techstep ASA

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

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

Diversification Opportunities for American Shipping and Techstep ASA

-0.49

Correlation Coefficient

American Shipping  Techstep ASA

Very good diversification

The 3 months correlation between American and Techstep is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding American Shipping and Techstep ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Techstep ASA and American Shipping 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 American Shipping are associated (or correlated) with Techstep ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Techstep ASA has no effect on the direction of American Shipping i.e., American Shipping and Techstep ASA go up and down completely randomly.

Pair Corralation between American Shipping and Techstep ASA

Assuming the 90 days trading horizon American Shipping is expected to under-perform the Techstep ASA. In addition to that, American Shipping is 5.1 times more volatile than Techstep ASA. It trades about -0.12 of its total potential returns per unit of risk. Techstep ASA is currently generating about 0.14 per unit of volatility. If you would invest  1,100  in Techstep ASA on April 30, 2025 and sell it today you would earn a total of  230.00  from holding Techstep ASA or generate 20.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

American Shipping  vs.  Techstep ASA

American Shipping

Risk-Adjusted Performance

Very Weak

Over the last 90 days American Shipping 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 essential indicators remain quite persistent which may send shares a bit higher in August 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Techstep ASA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Techstep ASA are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating essential indicators, Techstep ASA disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with American Shipping and Techstep ASA

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

The idea behind American Shipping and Techstep 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.