Correlation Between Hunter Group and Kongsberg Automotive
Can any of the company-specific risk be diversified away by investing in both Hunter Group and Kongsberg Automotive 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 Hunter Group and Kongsberg Automotive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hunter Group ASA and Kongsberg Automotive Holding, you can compare the effects of market volatilities on Hunter Group and Kongsberg Automotive 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 Hunter Group with a short position of Kongsberg Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hunter Group and Kongsberg Automotive.
Diversification Opportunities for Hunter Group and Kongsberg Automotive
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hunter and Kongsberg is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Hunter Group ASA and Kongsberg Automotive Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kongsberg Automotive and Hunter Group 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 Hunter Group ASA are associated (or correlated) with Kongsberg Automotive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kongsberg Automotive has no effect on the direction of Hunter Group i.e., Hunter Group and Kongsberg Automotive go up and down completely randomly.
Pair Corralation between Hunter Group and Kongsberg Automotive
Assuming the 90 days trading horizon Hunter Group ASA is expected to under-perform the Kongsberg Automotive. In addition to that, Hunter Group is 2.51 times more volatile than Kongsberg Automotive Holding. It trades about -0.36 of its total potential returns per unit of risk. Kongsberg Automotive Holding is currently generating about 0.01 per unit of volatility. If you would invest 153.00 in Kongsberg Automotive Holding on December 10, 2024 and sell it today you would earn a total of 0.00 from holding Kongsberg Automotive Holding or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hunter Group ASA vs. Kongsberg Automotive Holding
Performance |
| Timeline |
| Hunter Group ASA |
| Kongsberg Automotive |
Hunter Group and Kongsberg Automotive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hunter Group and Kongsberg Automotive
The main advantage of trading using opposite Hunter Group and Kongsberg Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hunter Group position performs unexpectedly, Kongsberg Automotive 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 Automotive will offset losses from the drop in Kongsberg Automotive's long position.| Hunter Group vs. Okeanis Eco Tankers | ||
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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