Correlation Between Akastor ASA and Calfrac Well

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

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

Diversification Opportunities for Akastor ASA and Calfrac Well

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Correlation Coefficient

Akastor ASA  Calfrac Well

Pay attention - limited upside

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

Pair Corralation between Akastor ASA and Calfrac Well

Assuming the 90 days horizon Akastor ASA is expected to generate 0.7 times more return on investment than Calfrac Well. However, Akastor ASA is 1.43 times less risky than Calfrac Well. It trades about 0.06 of its potential returns per unit of risk. Calfrac Well Services is currently generating about -0.01 per unit of risk. If you would invest  101.00  in Akastor ASA on September 4, 2024 and sell it today you would earn a total of  24.00  from holding Akastor ASA or generate 23.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.6%
Values	Daily Returns

Akastor ASA  vs.  Calfrac Well Services

Akastor ASA

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Akastor ASA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Akastor ASA is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Calfrac Well Services

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Calfrac Well Services has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Akastor ASA and Calfrac Well

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

The idea behind Akastor ASA and Calfrac Well Services 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.