Correlation Between Wallenius Wilhelmsen and Airthings ASA

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

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

Diversification Opportunities for Wallenius Wilhelmsen and Airthings ASA

0.4

Correlation Coefficient

Wallenius Wilhelmsen  Airthings ASA

Very weak diversification

The 3 months correlation between Wallenius and Airthings is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Wallenius Wilhelmsen Logistics and Airthings ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airthings ASA and Wallenius Wilhelmsen 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 Wallenius Wilhelmsen Logistics are associated (or correlated) with Airthings ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airthings ASA has no effect on the direction of Wallenius Wilhelmsen i.e., Wallenius Wilhelmsen and Airthings ASA go up and down completely randomly.

Pair Corralation between Wallenius Wilhelmsen and Airthings ASA

Assuming the 90 days trading horizon Wallenius Wilhelmsen Logistics is expected to under-perform the Airthings ASA. But the stock apears to be less risky and, when comparing its historical volatility, Wallenius Wilhelmsen Logistics is 1.42 times less risky than Airthings ASA. The stock trades about -0.11 of its potential returns per unit of risk. The Airthings ASA is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  235.00  in Airthings ASA on November 28, 2024 and sell it today you would lose (38.00) from holding Airthings ASA or give up 16.17% of portfolio value over 90 days.

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

Wallenius Wilhelmsen Logistics  vs.  Airthings ASA

Wallenius Wilhelmsen

Risk-Adjusted Performance

Very Weak

Over the last 90 days Wallenius Wilhelmsen Logistics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's essential indicators remain quite persistent which may send shares a bit higher in March 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Airthings ASA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Airthings ASA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's essential indicators remain quite persistent which may send shares a bit higher in March 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Wallenius Wilhelmsen and Airthings ASA

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

The idea behind Wallenius Wilhelmsen Logistics and Airthings 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.

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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.