Correlation Between Akastor ASA and Worley Parsons

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

By analyzing existing cross correlation between Akastor ASA and Worley Parsons, you can compare the effects of market volatilities on Akastor ASA and Worley Parsons 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 Worley Parsons. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akastor ASA and Worley Parsons.

Diversification Opportunities for Akastor ASA and Worley Parsons

0.4

Correlation Coefficient

Akastor ASA  Worley Parsons

Very weak diversification

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

Pair Corralation between Akastor ASA and Worley Parsons

Assuming the 90 days horizon Akastor ASA is expected to under-perform the Worley Parsons. But the pink sheet apears to be less risky and, when comparing its historical volatility, Akastor ASA is 3.06 times less risky than Worley Parsons. The pink sheet trades about -0.12 of its potential returns per unit of risk. The Worley Parsons is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  973.00  in Worley Parsons on September 29, 2024 and sell it today you would lose (123.00) from holding Worley Parsons or give up 12.64% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.21%
Values	Daily Returns

Akastor ASA  vs.  Worley Parsons

Akastor ASA

Risk-Adjusted Performance

0 of 100

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.

Worley Parsons

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Worley Parsons has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Akastor ASA and Worley Parsons

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

The idea behind Akastor ASA and Worley Parsons 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.