Correlation Between Aurskog Sparebank and Okea ASA

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

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

Diversification Opportunities for Aurskog Sparebank and Okea ASA

-0.66

Correlation Coefficient

Aurskog Sparebank  Okea ASA

Excellent diversification

The 3 months correlation between Aurskog and Okea is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Aurskog Sparebank and Okea ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Okea ASA and Aurskog Sparebank 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 Aurskog Sparebank are associated (or correlated) with Okea ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Okea ASA has no effect on the direction of Aurskog Sparebank i.e., Aurskog Sparebank and Okea ASA go up and down completely randomly.

Pair Corralation between Aurskog Sparebank and Okea ASA

Assuming the 90 days trading horizon Aurskog Sparebank is expected to generate 0.56 times more return on investment than Okea ASA. However, Aurskog Sparebank is 1.78 times less risky than Okea ASA. It trades about 0.11 of its potential returns per unit of risk. Okea ASA is currently generating about -0.06 per unit of risk. If you would invest  22,112  in Aurskog Sparebank on December 30, 2024 and sell it today you would earn a total of  1,863  from holding Aurskog Sparebank or generate 8.43% return on investment over 90 days.

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

Aurskog Sparebank  vs.  Okea ASA

Aurskog Sparebank

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aurskog Sparebank are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting essential indicators, Aurskog Sparebank may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Okea ASA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Okea ASA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's essential indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Aurskog Sparebank and Okea ASA

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

The idea behind Aurskog Sparebank and Okea ASA 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.