Correlation Between Waste Plastic and Instabank ASA

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

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

Diversification Opportunities for Waste Plastic and Instabank ASA

-0.39

Correlation Coefficient

Waste Plastic  Instabank ASA

Very good diversification

The 3 months correlation between Waste and Instabank is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Waste Plastic Upcycling and Instabank ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Instabank ASA and Waste Plastic 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 Waste Plastic Upcycling are associated (or correlated) with Instabank ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Instabank ASA has no effect on the direction of Waste Plastic i.e., Waste Plastic and Instabank ASA go up and down completely randomly.

Pair Corralation between Waste Plastic and Instabank ASA

Assuming the 90 days trading horizon Waste Plastic Upcycling is expected to under-perform the Instabank ASA. In addition to that, Waste Plastic is 2.08 times more volatile than Instabank ASA. It trades about -0.01 of its total potential returns per unit of risk. Instabank ASA is currently generating about 0.03 per unit of volatility. If you would invest  167.00  in Instabank ASA on October 31, 2024 and sell it today you would earn a total of  46.00  from holding Instabank ASA or generate 27.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.59%
Values	Daily Returns

Waste Plastic Upcycling  vs.  Instabank ASA

Waste Plastic Upcycling

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Waste Plastic Upcycling has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic 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.

Instabank ASA

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Instabank ASA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Instabank ASA may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with Waste Plastic and Instabank ASA

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

The idea behind Waste Plastic Upcycling and Instabank 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.

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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.