Correlation Between Cloudberry Clean and Aasen Sparebank

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

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

Diversification Opportunities for Cloudberry Clean and Aasen Sparebank

-0.62

Correlation Coefficient

Cloudberry Clean  Aasen Sparebank

Excellent diversification

The 3 months correlation between Cloudberry and Aasen is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Cloudberry Clean Energy and Aasen Sparebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aasen Sparebank and Cloudberry Clean 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 Cloudberry Clean Energy are associated (or correlated) with Aasen Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aasen Sparebank has no effect on the direction of Cloudberry Clean i.e., Cloudberry Clean and Aasen Sparebank go up and down completely randomly.

Pair Corralation between Cloudberry Clean and Aasen Sparebank

Assuming the 90 days trading horizon Cloudberry Clean Energy is expected to under-perform the Aasen Sparebank. In addition to that, Cloudberry Clean is 1.85 times more volatile than Aasen Sparebank. It trades about -0.08 of its total potential returns per unit of risk. Aasen Sparebank is currently generating about 0.07 per unit of volatility. If you would invest  11,390  in Aasen Sparebank on September 3, 2024 and sell it today you would earn a total of  510.00  from holding Aasen Sparebank or generate 4.48% return on investment over 90 days.

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

Cloudberry Clean Energy  vs.  Aasen Sparebank

Cloudberry Clean Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cloudberry Clean Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Aasen Sparebank

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Aasen Sparebank are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent essential indicators, Aasen Sparebank 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 Cloudberry Clean and Aasen Sparebank

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

The idea behind Cloudberry Clean Energy and Aasen Sparebank 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.

Check out your portfolio center.

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 Transaction History module to view history of all your transactions and understand their impact on performance.