Correlation Between Europris ASA and Kongsberg Gruppen
Can any of the company-specific risk be diversified away by investing in both Europris ASA and Kongsberg Gruppen 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 Europris ASA and Kongsberg Gruppen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Europris ASA and Kongsberg Gruppen ASA, you can compare the effects of market volatilities on Europris ASA and Kongsberg Gruppen 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 Europris ASA with a short position of Kongsberg Gruppen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Europris ASA and Kongsberg Gruppen.
Diversification Opportunities for Europris ASA and Kongsberg Gruppen
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Europris and Kongsberg is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Europris ASA and Kongsberg Gruppen ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kongsberg Gruppen ASA and Europris 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 Europris ASA are associated (or correlated) with Kongsberg Gruppen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kongsberg Gruppen ASA has no effect on the direction of Europris ASA i.e., Europris ASA and Kongsberg Gruppen go up and down completely randomly.
Pair Corralation between Europris ASA and Kongsberg Gruppen
Assuming the 90 days trading horizon Europris ASA is expected to under-perform the Kongsberg Gruppen. But the stock apears to be less risky and, when comparing its historical volatility, Europris ASA is 1.63 times less risky than Kongsberg Gruppen. The stock trades about -0.31 of its potential returns per unit of risk. The Kongsberg Gruppen ASA is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 116,600 in Kongsberg Gruppen ASA on August 28, 2024 and sell it today you would earn a total of 12,000 from holding Kongsberg Gruppen ASA or generate 10.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Europris ASA vs. Kongsberg Gruppen ASA
Performance |
| Timeline |
| Europris ASA |
| Kongsberg Gruppen ASA |
Europris ASA and Kongsberg Gruppen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Europris ASA and Kongsberg Gruppen
The main advantage of trading using opposite Europris ASA and Kongsberg Gruppen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Europris ASA position performs unexpectedly, Kongsberg Gruppen 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 Kongsberg Gruppen will offset losses from the drop in Kongsberg Gruppen's long position.| Europris ASA vs. Storebrand ASA | Europris ASA vs. XXL ASA | Europris ASA vs. Orkla ASA | Europris ASA vs. DnB ASA |
| Kongsberg Gruppen vs. DnB ASA | Kongsberg Gruppen vs. Orkla ASA | Kongsberg Gruppen vs. Storebrand ASA | Kongsberg Gruppen vs. Yara International 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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