Correlation Between Aker Solutions and Prosafe SE

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

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

Diversification Opportunities for Aker Solutions and Prosafe SE

-0.12

Correlation Coefficient

Aker Solutions  Prosafe SE

Good diversification

The 3 months correlation between Aker and Prosafe is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Aker Solutions ASA and Prosafe SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prosafe SE and Aker Solutions 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 Solutions ASA are associated (or correlated) with Prosafe SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prosafe SE has no effect on the direction of Aker Solutions i.e., Aker Solutions and Prosafe SE go up and down completely randomly.

Pair Corralation between Aker Solutions and Prosafe SE

Assuming the 90 days trading horizon Aker Solutions is expected to generate 3.6 times less return on investment than Prosafe SE. But when comparing it to its historical volatility, Aker Solutions ASA is 4.69 times less risky than Prosafe SE. It trades about 0.08 of its potential returns per unit of risk. Prosafe SE is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  699.00  in Prosafe SE on December 30, 2024 and sell it today you would earn a total of  81.00  from holding Prosafe SE or generate 11.59% return on investment over 90 days.

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

Aker Solutions ASA  vs.  Prosafe SE

Aker Solutions ASA

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Aker Solutions ASA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting essential indicators, Aker Solutions may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Prosafe SE

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Prosafe SE are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Prosafe SE disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aker Solutions and Prosafe SE

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

The idea behind Aker Solutions ASA and Prosafe SE 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.