Correlation Between Airthings ASA and Kraft Bank
Can any of the company-specific risk be diversified away by investing in both Airthings ASA and Kraft Bank 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 Airthings ASA and Kraft Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Airthings ASA and Kraft Bank Asa, you can compare the effects of market volatilities on Airthings ASA and Kraft Bank 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 Airthings ASA with a short position of Kraft Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airthings ASA and Kraft Bank.
Diversification Opportunities for Airthings ASA and Kraft Bank
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Airthings and Kraft is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Airthings ASA and Kraft Bank Asa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kraft Bank Asa and Airthings ASA 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 Airthings ASA are associated (or correlated) with Kraft Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kraft Bank Asa has no effect on the direction of Airthings ASA i.e., Airthings ASA and Kraft Bank go up and down completely randomly.
Pair Corralation between Airthings ASA and Kraft Bank
Assuming the 90 days trading horizon Airthings ASA is expected to under-perform the Kraft Bank. In addition to that, Airthings ASA is 1.01 times more volatile than Kraft Bank Asa. It trades about -0.04 of its total potential returns per unit of risk. Kraft Bank Asa is currently generating about -0.02 per unit of volatility. If you would invest 900.00 in Kraft Bank Asa on September 1, 2024 and sell it today you would lose (15.00) from holding Kraft Bank Asa or give up 1.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Airthings ASA vs. Kraft Bank Asa
Performance |
| Timeline |
| Airthings ASA |
| Kraft Bank Asa |
Airthings ASA and Kraft Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airthings ASA and Kraft Bank
The main advantage of trading using opposite Airthings ASA and Kraft Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airthings ASA position performs unexpectedly, Kraft Bank 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 Kraft Bank will offset losses from the drop in Kraft Bank's long position.| Airthings ASA vs. Atlantic Sapphire As | Airthings ASA vs. Vow ASA | Airthings ASA vs. Aker Horizons AS | Airthings ASA vs. Saga Pure ASA |
| Kraft Bank vs. Romerike Sparebank | Kraft Bank vs. Nidaros Sparebank | Kraft Bank vs. Odfjell Drilling | Kraft Bank vs. Helgeland Sparebank |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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