Correlation Between ROCKWOOL International and Aquaporin

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

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

Diversification Opportunities for ROCKWOOL International and Aquaporin

-0.66

Correlation Coefficient

ROCKWOOL International  Aquaporin

Excellent diversification

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

Pair Corralation between ROCKWOOL International and Aquaporin

Assuming the 90 days trading horizon ROCKWOOL International AS is expected to generate 0.71 times more return on investment than Aquaporin. However, ROCKWOOL International AS is 1.42 times less risky than Aquaporin. It trades about 0.11 of its potential returns per unit of risk. Aquaporin AS is currently generating about 0.04 per unit of risk. If you would invest  259,200  in ROCKWOOL International AS on December 25, 2024 and sell it today you would earn a total of  53,800  from holding ROCKWOOL International AS or generate 20.76% return on investment over 90 days.

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

ROCKWOOL International AS  vs.  Aquaporin AS

ROCKWOOL International

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ROCKWOOL International AS are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating fundamental indicators, ROCKWOOL International sustained solid returns over the last few months and may actually be approaching a breakup point.

Aquaporin AS

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Aquaporin AS are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Aquaporin may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with ROCKWOOL International and Aquaporin

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

The idea behind ROCKWOOL International AS and Aquaporin AS 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.