Correlation Between Horisont Energi and Napatech
Can any of the company-specific risk be diversified away by investing in both Horisont Energi and Napatech 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 Horisont Energi and Napatech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Horisont Energi AS and Napatech AS, you can compare the effects of market volatilities on Horisont Energi and Napatech 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 Horisont Energi with a short position of Napatech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Horisont Energi and Napatech.
Diversification Opportunities for Horisont Energi and Napatech
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Horisont and Napatech is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Horisont Energi AS and Napatech AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Napatech AS and Horisont Energi 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 Horisont Energi AS are associated (or correlated) with Napatech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Napatech AS has no effect on the direction of Horisont Energi i.e., Horisont Energi and Napatech go up and down completely randomly.
Pair Corralation between Horisont Energi and Napatech
Assuming the 90 days trading horizon Horisont Energi AS is expected to under-perform the Napatech. In addition to that, Horisont Energi is 1.15 times more volatile than Napatech AS. It trades about -0.37 of its total potential returns per unit of risk. Napatech AS is currently generating about -0.27 per unit of volatility. If you would invest 2,700 in Napatech AS on September 3, 2024 and sell it today you would lose (300.00) from holding Napatech AS or give up 11.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Horisont Energi AS vs. Napatech AS
Performance |
| Timeline |
| Horisont Energi AS |
| Napatech AS |
Horisont Energi and Napatech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Horisont Energi and Napatech
The main advantage of trading using opposite Horisont Energi and Napatech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Horisont Energi position performs unexpectedly, Napatech 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 Napatech will offset losses from the drop in Napatech's long position.| Horisont Energi vs. Melhus Sparebank | Horisont Energi vs. Austevoll Seafood ASA | Horisont Energi vs. Sea1 Offshore | Horisont Energi vs. Sunndal Sparebank |
| Napatech vs. Idex ASA | Napatech vs. Next Biometrics Group | Napatech vs. Polight ASA | Napatech vs. Kitron 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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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