Correlation Between Aker Carbon and Eestech

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

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

Diversification Opportunities for Aker Carbon and Eestech

0.0

Correlation Coefficient

Aker Carbon  Eestech

Pay attention - limited upside

The 3 months correlation between Aker and Eestech is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aker Carbon Capture and Eestech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eestech and Aker Carbon 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 Carbon Capture are associated (or correlated) with Eestech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eestech has no effect on the direction of Aker Carbon i.e., Aker Carbon and Eestech go up and down completely randomly.

Pair Corralation between Aker Carbon and Eestech

If you would invest  56.00  in Aker Carbon Capture on December 1, 2024 and sell it today you would earn a total of  10.00  from holding Aker Carbon Capture or generate 17.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Aker Carbon Capture  vs.  Eestech

Aker Carbon Capture

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aker Carbon Capture are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Aker Carbon reported solid returns over the last few months and may actually be approaching a breakup point.

Eestech

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eestech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Eestech is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Aker Carbon and Eestech

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

The idea behind Aker Carbon Capture and Eestech 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.

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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.