Correlation Between Aker Horizons and Aker ASA

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

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

Diversification Opportunities for Aker Horizons and Aker ASA

-0.46

Correlation Coefficient

Aker Horizons  Aker ASA

Very good diversification

The 3 months correlation between Aker and Aker is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Aker Horizons AS and Aker ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aker ASA and Aker Horizons 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 Horizons AS are associated (or correlated) with Aker ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aker ASA has no effect on the direction of Aker Horizons i.e., Aker Horizons and Aker ASA go up and down completely randomly.

Pair Corralation between Aker Horizons and Aker ASA

Assuming the 90 days trading horizon Aker Horizons AS is expected to under-perform the Aker ASA. In addition to that, Aker Horizons is 3.46 times more volatile than Aker ASA. It trades about -0.13 of its total potential returns per unit of risk. Aker ASA is currently generating about 0.15 per unit of volatility. If you would invest  54,900  in Aker ASA on December 29, 2024 and sell it today you would earn a total of  7,600  from holding Aker ASA or generate 13.84% return on investment over 90 days.

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

Aker Horizons AS  vs.  Aker ASA

Aker Horizons AS

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aker Horizons AS 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 technical indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Aker ASA

Risk-Adjusted Performance

Good

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

Pair Trading with Aker Horizons and Aker ASA

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

The idea behind Aker Horizons AS and Aker 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.