Correlation Between ABG Sundal and Kid ASA
Can any of the company-specific risk be diversified away by investing in both ABG Sundal and Kid 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 ABG Sundal and Kid ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ABG Sundal Collier and Kid ASA, you can compare the effects of market volatilities on ABG Sundal and Kid 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 ABG Sundal with a short position of Kid ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABG Sundal and Kid ASA.
Diversification Opportunities for ABG Sundal and Kid ASA
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ABG and Kid is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding ABG Sundal Collier and Kid ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kid ASA and ABG Sundal 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 ABG Sundal Collier are associated (or correlated) with Kid ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kid ASA has no effect on the direction of ABG Sundal i.e., ABG Sundal and Kid ASA go up and down completely randomly.
Pair Corralation between ABG Sundal and Kid ASA
Assuming the 90 days trading horizon ABG Sundal Collier is expected to generate 0.43 times more return on investment than Kid ASA. However, ABG Sundal Collier is 2.33 times less risky than Kid ASA. It trades about -0.02 of its potential returns per unit of risk. Kid ASA is currently generating about -0.29 per unit of risk. If you would invest 712.00 in ABG Sundal Collier on August 25, 2024 and sell it today you would lose (4.00) from holding ABG Sundal Collier or give up 0.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ABG Sundal Collier vs. Kid ASA
Performance |
| Timeline |
| ABG Sundal Collier |
| Kid ASA |
ABG Sundal and Kid ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ABG Sundal and Kid ASA
The main advantage of trading using opposite ABG Sundal and Kid ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABG Sundal position performs unexpectedly, Kid 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 Kid ASA will offset losses from the drop in Kid ASA's long position.| ABG Sundal vs. Kid ASA | ABG Sundal vs. Selvaag Bolig ASA | ABG Sundal vs. Elkem ASA | ABG Sundal vs. Europris ASA |
| Kid ASA vs. Europris ASA | Kid ASA vs. Selvaag Bolig ASA | Kid ASA vs. Storebrand ASA | Kid ASA vs. Kitron ASA |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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