Correlation Between Crayon Group and Itera ASA

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

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

Diversification Opportunities for Crayon Group and Itera ASA

0.5

Correlation Coefficient

Crayon Group  Itera ASA

Very weak diversification

The 3 months correlation between Crayon and Itera is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Crayon Group Holding and Itera ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itera ASA and Crayon Group 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 Crayon Group Holding are associated (or correlated) with Itera ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Itera ASA has no effect on the direction of Crayon Group i.e., Crayon Group and Itera ASA go up and down completely randomly.

Pair Corralation between Crayon Group and Itera ASA

Assuming the 90 days trading horizon Crayon Group Holding is expected to generate 0.57 times more return on investment than Itera ASA. However, Crayon Group Holding is 1.74 times less risky than Itera ASA. It trades about 0.24 of its potential returns per unit of risk. Itera ASA is currently generating about 0.01 per unit of risk. If you would invest  11,630  in Crayon Group Holding on April 23, 2025 and sell it today you would earn a total of  2,770  from holding Crayon Group Holding or generate 23.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	88.71%
Values	Daily Returns

Crayon Group Holding  vs.  Itera ASA

Crayon Group Holding

Risk-Adjusted Performance

Solid

Over the last 90 days Crayon Group Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very unfluctuating basic indicators, Crayon Group displayed solid returns over the last few months and may actually be approaching a breakup point.

Itera ASA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Itera ASA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Itera ASA is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Crayon Group and Itera ASA

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

The idea behind Crayon Group Holding and Itera 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.