Correlation Between SKAKO AS and Agat Ejendomme

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

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

Diversification Opportunities for SKAKO AS and Agat Ejendomme

-0.12

Correlation Coefficient

SKAKO AS  Agat Ejendomme

Good diversification

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

Pair Corralation between SKAKO AS and Agat Ejendomme

Assuming the 90 days trading horizon SKAKO AS is expected to generate 2.09 times less return on investment than Agat Ejendomme. But when comparing it to its historical volatility, SKAKO AS is 1.67 times less risky than Agat Ejendomme. It trades about 0.02 of its potential returns per unit of risk. Agat Ejendomme AS is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  139.00  in Agat Ejendomme AS on December 21, 2024 and sell it today you would earn a total of  2.00  from holding Agat Ejendomme AS or generate 1.44% return on investment over 90 days.

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

SKAKO AS  vs.  Agat Ejendomme AS

SKAKO AS

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SKAKO AS are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, SKAKO AS is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Agat Ejendomme AS

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Agat Ejendomme AS are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Agat Ejendomme is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with SKAKO AS and Agat Ejendomme

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

The idea behind SKAKO AS and Agat Ejendomme 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.