Correlation Between Elopak AS and Kitron ASA
Can any of the company-specific risk be diversified away by investing in both Elopak AS 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 Elopak AS and Kitron ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elopak AS and Kitron ASA, you can compare the effects of market volatilities on Elopak AS 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 Elopak AS with a short position of Kitron ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elopak AS and Kitron ASA.
Diversification Opportunities for Elopak AS and Kitron ASA
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Elopak and Kitron is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Elopak AS and Kitron ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kitron ASA and Elopak AS 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 Elopak AS 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 Elopak AS i.e., Elopak AS and Kitron ASA go up and down completely randomly.
Pair Corralation between Elopak AS and Kitron ASA
Assuming the 90 days trading horizon Elopak AS is expected to under-perform the Kitron ASA. But the stock apears to be less risky and, when comparing its historical volatility, Elopak AS is 1.2 times less risky than Kitron ASA. The stock trades about -0.04 of its potential returns per unit of risk. The Kitron ASA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 3,124 in Kitron ASA on September 1, 2024 and sell it today you would earn a total of 26.00 from holding Kitron ASA or generate 0.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elopak AS vs. Kitron ASA
Performance |
| Timeline |
| Elopak AS |
| Kitron ASA |
Elopak AS and Kitron ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elopak AS and Kitron ASA
The main advantage of trading using opposite Elopak AS and Kitron ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elopak AS 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.| Elopak AS vs. Elkem ASA | Elopak AS vs. Norske Skog Asa | Elopak AS vs. Kitron ASA | Elopak AS vs. Europris ASA |
| 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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