Correlation Between Worley and Aker Solutions
Can any of the company-specific risk be diversified away by investing in both Worley and Aker Solutions 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 Worley and Aker Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Worley Limited and Aker Solutions ASA, you can compare the effects of market volatilities on Worley and Aker Solutions 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 Worley with a short position of Aker Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Worley and Aker Solutions.
Diversification Opportunities for Worley and Aker Solutions
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Worley and Aker is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Worley Limited and Aker Solutions ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aker Solutions ASA and Worley 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 Worley Limited are associated (or correlated) with Aker Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aker Solutions ASA has no effect on the direction of Worley i.e., Worley and Aker Solutions go up and down completely randomly.
Pair Corralation between Worley and Aker Solutions
Assuming the 90 days horizon Worley Limited is expected to under-perform the Aker Solutions. But the pink sheet apears to be less risky and, when comparing its historical volatility, Worley Limited is 2.75 times less risky than Aker Solutions. The pink sheet trades about -0.01 of its potential returns per unit of risk. The Aker Solutions ASA is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 296.00 in Aker Solutions ASA on September 22, 2024 and sell it today you would earn a total of 704.00 from holding Aker Solutions ASA or generate 237.84% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 82.06% |
Values | Daily Returns |
Worley Limited vs. Aker Solutions ASA
Performance |
Timeline |
Worley Limited |
Aker Solutions ASA |
Worley and Aker Solutions Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Worley and Aker Solutions
The main advantage of trading using opposite Worley and Aker Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Worley position performs unexpectedly, Aker Solutions 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 Aker Solutions will offset losses from the drop in Aker Solutions' long position.Worley vs. SMG Industries | Worley vs. NXT Energy Solutions | Worley vs. Dawson Geophysical | Worley vs. Calfrac Well Services |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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