Correlation Between BK Technologies and Schibsted ASA
Can any of the company-specific risk be diversified away by investing in both BK Technologies and Schibsted 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 BK Technologies and Schibsted ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BK Technologies and Schibsted ASA ADR, you can compare the effects of market volatilities on BK Technologies and Schibsted 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 BK Technologies with a short position of Schibsted ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of BK Technologies and Schibsted ASA.
Diversification Opportunities for BK Technologies and Schibsted ASA
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between BKTI and Schibsted is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding BK Technologies and Schibsted ASA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schibsted ASA ADR and BK Technologies 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 BK Technologies are associated (or correlated) with Schibsted ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schibsted ASA ADR has no effect on the direction of BK Technologies i.e., BK Technologies and Schibsted ASA go up and down completely randomly.
Pair Corralation between BK Technologies and Schibsted ASA
Given the investment horizon of 90 days BK Technologies is expected to generate 1.84 times less return on investment than Schibsted ASA. But when comparing it to its historical volatility, BK Technologies is 1.49 times less risky than Schibsted ASA. It trades about 0.04 of its potential returns per unit of risk. Schibsted ASA ADR is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,599 in Schibsted ASA ADR on October 25, 2024 and sell it today you would earn a total of 1,465 from holding Schibsted ASA ADR or generate 91.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 82.56% |
| Values | Daily Returns |
BK Technologies vs. Schibsted ASA ADR
Performance |
| Timeline |
| BK Technologies |
| Schibsted ASA ADR |
BK Technologies and Schibsted ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BK Technologies and Schibsted ASA
The main advantage of trading using opposite BK Technologies and Schibsted ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BK Technologies position performs unexpectedly, Schibsted 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 Schibsted ASA will offset losses from the drop in Schibsted ASA's long position.| BK Technologies vs. Frequency Electronics | BK Technologies vs. Actelis Networks | BK Technologies vs. Optical Cable | BK Technologies vs. Baylin Technologies |
| Schibsted ASA vs. Ispire Technology Common | Schibsted ASA vs. Arhaus Inc | Schibsted ASA vs. Pool Corporation | Schibsted ASA vs. Universal |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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