Correlation Between Goodtech and Aasen Sparebank

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

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

Diversification Opportunities for Goodtech and Aasen Sparebank

0.65

Correlation Coefficient

Goodtech  Aasen Sparebank

Poor diversification

The 3 months correlation between Goodtech and Aasen is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Goodtech and Aasen Sparebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aasen Sparebank and Goodtech 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 Goodtech are associated (or correlated) with Aasen Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aasen Sparebank has no effect on the direction of Goodtech i.e., Goodtech and Aasen Sparebank go up and down completely randomly.

Pair Corralation between Goodtech and Aasen Sparebank

Assuming the 90 days trading horizon Goodtech is expected to generate 1.02 times more return on investment than Aasen Sparebank. However, Goodtech is 1.02 times more volatile than Aasen Sparebank. It trades about 0.13 of its potential returns per unit of risk. Aasen Sparebank is currently generating about 0.07 per unit of risk. If you would invest  846.00  in Goodtech on April 24, 2025 and sell it today you would earn a total of  114.00  from holding Goodtech or generate 13.48% return on investment over 90 days.

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

Goodtech  vs.  Aasen Sparebank

Goodtech

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Goodtech are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting fundamental indicators, Goodtech disclosed solid returns over the last few months and may actually be approaching a breakup point.

Aasen Sparebank

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Aasen Sparebank are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating essential indicators, Aasen Sparebank may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Goodtech and Aasen Sparebank

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

The idea behind Goodtech and Aasen Sparebank 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.