Correlation Between Akastor ASA and Pulse Seismic

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Can any of the company-specific risk be diversified away by investing in both Akastor ASA and Pulse Seismic 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 Pulse Seismic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Akastor ASA and Pulse Seismic, you can compare the effects of market volatilities on Akastor ASA and Pulse Seismic 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 Pulse Seismic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akastor ASA and Pulse Seismic.

Diversification Opportunities for Akastor ASA and Pulse Seismic

0.4
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Akastor and Pulse is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Akastor ASA and Pulse Seismic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pulse Seismic 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 Pulse Seismic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pulse Seismic has no effect on the direction of Akastor ASA i.e., Akastor ASA and Pulse Seismic go up and down completely randomly.

Pair Corralation between Akastor ASA and Pulse Seismic

Assuming the 90 days horizon Akastor ASA is expected to under-perform the Pulse Seismic. But the pink sheet apears to be less risky and, when comparing its historical volatility, Akastor ASA is 2.25 times less risky than Pulse Seismic. The pink sheet trades about -0.12 of its potential returns per unit of risk. The Pulse Seismic is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  178.00  in Pulse Seismic on September 29, 2024 and sell it today you would lose (16.00) from holding Pulse Seismic or give up 8.99% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Akastor ASA  vs.  Pulse Seismic

 Performance 
       Timeline  
Akastor ASA 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Akastor ASA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.
Pulse Seismic 

Risk-Adjusted Performance

0 of 100

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

Akastor ASA and Pulse Seismic Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Akastor ASA and Pulse Seismic

The main advantage of trading using opposite Akastor ASA and Pulse Seismic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akastor ASA position performs unexpectedly, Pulse Seismic 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 Pulse Seismic will offset losses from the drop in Pulse Seismic's long position.
The idea behind Akastor ASA and Pulse Seismic 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.

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