Correlation Between Idex ASA and Napatech
Can any of the company-specific risk be diversified away by investing in both Idex ASA 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 Idex ASA and Napatech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Idex ASA and Napatech AS, you can compare the effects of market volatilities on Idex ASA 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 Idex ASA with a short position of Napatech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Idex ASA and Napatech.
Diversification Opportunities for Idex ASA and Napatech
Average diversification
The 3 months correlation between Idex and Napatech is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Idex ASA and Napatech AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Napatech AS and Idex 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 Idex ASA 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 Idex ASA i.e., Idex ASA and Napatech go up and down completely randomly.
Pair Corralation between Idex ASA and Napatech
Assuming the 90 days trading horizon Idex ASA is expected to under-perform the Napatech. In addition to that, Idex ASA is 2.69 times more volatile than Napatech AS. It trades about -0.21 of its total potential returns per unit of risk. Napatech AS is currently generating about -0.06 per unit of volatility. If you would invest 3,360 in Napatech AS on November 3, 2024 and sell it today you would lose (800.00) from holding Napatech AS or give up 23.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Idex ASA vs. Napatech AS
Performance |
| Timeline |
| Idex ASA |
| Napatech AS |
Idex ASA and Napatech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Idex ASA and Napatech
The main advantage of trading using opposite Idex ASA and Napatech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Idex ASA 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.| Idex ASA vs. Next Biometrics Group | Idex ASA vs. Kongsberg Automotive Holding | Idex ASA vs. Bergenbio ASA | Idex ASA vs. XXL ASA |
| 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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