Correlation Between Karolinska Development and Net Insight
Can any of the company-specific risk be diversified away by investing in both Karolinska Development and Net Insight 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 Karolinska Development and Net Insight into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Karolinska Development AB and Net Insight AB, you can compare the effects of market volatilities on Karolinska Development and Net Insight 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 Karolinska Development with a short position of Net Insight. Check out your portfolio center. Please also check ongoing floating volatility patterns of Karolinska Development and Net Insight.
Diversification Opportunities for Karolinska Development and Net Insight
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Karolinska and Net is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Karolinska Development AB and Net Insight AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Net Insight AB and Karolinska Development 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 Karolinska Development AB are associated (or correlated) with Net Insight. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Net Insight AB has no effect on the direction of Karolinska Development i.e., Karolinska Development and Net Insight go up and down completely randomly.
Pair Corralation between Karolinska Development and Net Insight
Assuming the 90 days trading horizon Karolinska Development AB is expected to under-perform the Net Insight. In addition to that, Karolinska Development is 1.46 times more volatile than Net Insight AB. It trades about -0.08 of its total potential returns per unit of risk. Net Insight AB is currently generating about 0.01 per unit of volatility. If you would invest 697.00 in Net Insight AB on September 2, 2024 and sell it today you would earn a total of 4.00 from holding Net Insight AB or generate 0.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Karolinska Development AB vs. Net Insight AB
Performance |
| Timeline |
| Karolinska Development |
| Net Insight AB |
Karolinska Development and Net Insight Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Karolinska Development and Net Insight
The main advantage of trading using opposite Karolinska Development and Net Insight positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Karolinska Development position performs unexpectedly, Net Insight 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 Net Insight will offset losses from the drop in Net Insight's long position.| Karolinska Development vs. Cantargia AB | Karolinska Development vs. BioArctic AB | Karolinska Development vs. Hansa Biopharma AB | Karolinska Development vs. BioInvent International AB |
| Net Insight vs. New Wave Group | Net Insight vs. Cantargia AB | Net Insight vs. Enea AB | Net Insight vs. Proact IT Group |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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