Correlation Between Betsson AB and Kitron ASA
Can any of the company-specific risk be diversified away by investing in both Betsson AB and Kitron 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 Betsson AB and Kitron ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Betsson AB and Kitron ASA, you can compare the effects of market volatilities on Betsson AB and Kitron 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 Betsson AB with a short position of Kitron ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Betsson AB and Kitron ASA.
Diversification Opportunities for Betsson AB and Kitron ASA
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Betsson and Kitron is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Betsson AB and Kitron ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kitron ASA and Betsson AB 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 Betsson AB are associated (or correlated) with Kitron ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kitron ASA has no effect on the direction of Betsson AB i.e., Betsson AB and Kitron ASA go up and down completely randomly.
Pair Corralation between Betsson AB and Kitron ASA
Assuming the 90 days trading horizon Betsson AB is expected to generate 0.82 times more return on investment than Kitron ASA. However, Betsson AB is 1.22 times less risky than Kitron ASA. It trades about 0.05 of its potential returns per unit of risk. Kitron ASA is currently generating about -0.03 per unit of risk. If you would invest 10,457 in Betsson AB on August 29, 2024 and sell it today you would earn a total of 3,967 from holding Betsson AB or generate 37.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.75% |
| Values | Daily Returns |
Betsson AB vs. Kitron ASA
Performance |
| Timeline |
| Betsson AB |
| Kitron ASA |
Betsson AB and Kitron ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Betsson AB and Kitron ASA
The main advantage of trading using opposite Betsson AB and Kitron ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Betsson AB position performs unexpectedly, Kitron 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 Kitron ASA will offset losses from the drop in Kitron ASA's long position.| Betsson AB vs. Kambi Group PLC | Betsson AB vs. Catena Media plc | Betsson AB vs. Evolution AB | Betsson AB vs. Tele2 AB |
| Kitron ASA vs. Europris ASA | Kitron ASA vs. Kongsberg Gruppen ASA | Kitron ASA vs. Nordic Semiconductor ASA | Kitron ASA vs. Storebrand 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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