Correlation Between Atlantic Sapphire and Techstep ASA

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

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

Diversification Opportunities for Atlantic Sapphire and Techstep ASA

0.64

Correlation Coefficient

Atlantic Sapphire  Techstep ASA

Poor diversification

The 3 months correlation between Atlantic and Techstep is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Atlantic Sapphire As and Techstep ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Techstep ASA and Atlantic Sapphire 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 Atlantic Sapphire As 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 Atlantic Sapphire i.e., Atlantic Sapphire and Techstep ASA go up and down completely randomly.

Pair Corralation between Atlantic Sapphire and Techstep ASA

Assuming the 90 days trading horizon Atlantic Sapphire As is expected to generate 4.17 times more return on investment than Techstep ASA. However, Atlantic Sapphire is 4.17 times more volatile than Techstep ASA. It trades about 0.09 of its potential returns per unit of risk. Techstep ASA is currently generating about 0.11 per unit of risk. If you would invest  680.00  in Atlantic Sapphire As on May 1, 2025 and sell it today you would earn a total of  275.00  from holding Atlantic Sapphire As or generate 40.44% return on investment over 90 days.

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

Atlantic Sapphire As  vs.  Techstep ASA

Atlantic Sapphire

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Atlantic Sapphire As are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Atlantic Sapphire disclosed solid returns over the last few months and may actually be approaching a breakup point.

Techstep ASA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Techstep ASA are ranked lower than 8 (%) 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 Atlantic Sapphire and Techstep ASA

The main advantage of trading using opposite Atlantic Sapphire and Techstep ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlantic Sapphire 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 Atlantic Sapphire As 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.