Correlation Between Aker Solutions and Shelf Drilling

Can any of the company-specific risk be diversified away by investing in both Aker Solutions and Shelf Drilling 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 Shelf Drilling 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 Shelf Drilling, you can compare the effects of market volatilities on Aker Solutions and Shelf Drilling 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 Shelf Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aker Solutions and Shelf Drilling.

Diversification Opportunities for Aker Solutions and Shelf Drilling

0.0

Correlation Coefficient

Aker Solutions  Shelf Drilling

Pay attention - limited upside

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

Pair Corralation between Aker Solutions and Shelf Drilling

If you would invest  3,110  in Aker Solutions ASA on December 29, 2024 and sell it today you would earn a total of  290.00  from holding Aker Solutions ASA or generate 9.32% return on investment over 90 days.

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

Aker Solutions ASA  vs.  Shelf Drilling

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 6 (%) 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.

Shelf Drilling

Risk-Adjusted Performance

Very Weak

Over the last 90 days Shelf Drilling has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, Shelf Drilling is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Aker Solutions and Shelf Drilling

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

The idea behind Aker Solutions ASA and Shelf Drilling 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.