Correlation Between Aker ASA and Apple
Can any of the company-specific risk be diversified away by investing in both Aker ASA and Apple 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 Aker ASA and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aker ASA and Apple Inc, you can compare the effects of market volatilities on Aker ASA and Apple 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 Aker ASA with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aker ASA and Apple.
Diversification Opportunities for Aker ASA and Apple
Very poor diversification
The 3 months correlation between Aker and Apple is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Aker ASA and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and Aker 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 Aker ASA are associated (or correlated) with Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Aker ASA i.e., Aker ASA and Apple go up and down completely randomly.
Pair Corralation between Aker ASA and Apple
Assuming the 90 days horizon Aker ASA is expected to generate 7.87 times more return on investment than Apple. However, Aker ASA is 7.87 times more volatile than Apple Inc. It trades about 0.06 of its potential returns per unit of risk. Apple Inc is currently generating about 0.04 per unit of risk. If you would invest 5,275 in Aker ASA on December 29, 2023 and sell it today you would earn a total of 500.00 from holding Aker ASA or generate 9.48% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 99.73% |
Values | Daily Returns |
Aker ASA vs. Apple Inc
Performance |
Timeline |
Aker ASA |
Apple Inc |
Aker ASA and Apple Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Aker ASA and Apple
The main advantage of trading using opposite Aker ASA and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aker ASA position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.Aker ASA vs. Honeywell International | Aker ASA vs. 3M Company | Aker ASA vs. Hitachi Ltd ADR | Aker ASA vs. Citic Ltd ADR |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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