Correlation Between Integrated Wind and Kongsberg Automotive
Can any of the company-specific risk be diversified away by investing in both Integrated Wind 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 Integrated Wind and Kongsberg Automotive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Integrated Wind Solutions and Kongsberg Automotive Holding, you can compare the effects of market volatilities on Integrated Wind 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 Integrated Wind with a short position of Kongsberg Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integrated Wind and Kongsberg Automotive.
Diversification Opportunities for Integrated Wind and Kongsberg Automotive
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Integrated and Kongsberg is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Integrated Wind Solutions and Kongsberg Automotive Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kongsberg Automotive and Integrated Wind 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 Integrated Wind Solutions 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 Integrated Wind i.e., Integrated Wind and Kongsberg Automotive go up and down completely randomly.
Pair Corralation between Integrated Wind and Kongsberg Automotive
Assuming the 90 days trading horizon Integrated Wind Solutions is expected to under-perform the Kongsberg Automotive. But the stock apears to be less risky and, when comparing its historical volatility, Integrated Wind Solutions is 1.29 times less risky than Kongsberg Automotive. The stock trades about -0.08 of its potential returns per unit of risk. The Kongsberg Automotive Holding is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 140.00 in Kongsberg Automotive Holding on September 1, 2024 and sell it today you would earn a total of 10.00 from holding Kongsberg Automotive Holding or generate 7.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Integrated Wind Solutions vs. Kongsberg Automotive Holding
Performance |
| Timeline |
| Integrated Wind Solutions |
| Kongsberg Automotive |
Integrated Wind and Kongsberg Automotive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Integrated Wind and Kongsberg Automotive
The main advantage of trading using opposite Integrated Wind and Kongsberg Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integrated Wind 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.| Integrated Wind vs. Edda Wind ASA | Integrated Wind vs. Cloudberry Clean Energy | Integrated Wind vs. Cadeler As | Integrated Wind vs. Otovo AS |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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