Correlation Between Vow ASA and Aduro Clean

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

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

Diversification Opportunities for Vow ASA and Aduro Clean

-0.86

Correlation Coefficient

Vow ASA  Aduro Clean

Pay attention - limited upside

The 3 months correlation between Vow and Aduro is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Vow ASA and Aduro Clean Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aduro Clean Technologies and Vow ASA 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 Vow ASA are associated (or correlated) with Aduro Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aduro Clean Technologies has no effect on the direction of Vow ASA i.e., Vow ASA and Aduro Clean go up and down completely randomly.

Pair Corralation between Vow ASA and Aduro Clean

If you would invest  16.00  in Vow ASA on October 27, 2024 and sell it today you would earn a total of  0.00  from holding Vow ASA or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	90.48%
Values	Daily Returns

Vow ASA  vs.  Aduro Clean Technologies

Vow ASA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vow ASA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Aduro Clean Technologies

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Aduro Clean Technologies are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical indicators, Aduro Clean reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vow ASA and Aduro Clean

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

The idea behind Vow ASA and Aduro Clean Technologies 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.