Correlation Between Kid ASA and DnB ASA
Can any of the company-specific risk be diversified away by investing in both Kid ASA and DnB ASA 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 Kid ASA and DnB ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kid ASA and DnB ASA, you can compare the effects of market volatilities on Kid ASA and DnB ASA 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 Kid ASA with a short position of DnB ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kid ASA and DnB ASA.
Diversification Opportunities for Kid ASA and DnB ASA
Very good diversification
The 3 months correlation between Kid and DnB is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Kid ASA and DnB ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DnB ASA and Kid 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 Kid ASA are associated (or correlated) with DnB ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DnB ASA has no effect on the direction of Kid ASA i.e., Kid ASA and DnB ASA go up and down completely randomly.
Pair Corralation between Kid ASA and DnB ASA
Assuming the 90 days trading horizon Kid ASA is expected to under-perform the DnB ASA. In addition to that, Kid ASA is 3.39 times more volatile than DnB ASA. It trades about -0.3 of its total potential returns per unit of risk. DnB ASA is currently generating about -0.01 per unit of volatility. If you would invest 23,100 in DnB ASA on August 25, 2024 and sell it today you would lose (50.00) from holding DnB ASA or give up 0.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kid ASA vs. DnB ASA
Performance |
| Timeline |
| Kid ASA |
| DnB ASA |
Kid ASA and DnB ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kid ASA and DnB ASA
The main advantage of trading using opposite Kid ASA and DnB ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kid ASA position performs unexpectedly, DnB ASA 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 DnB ASA will offset losses from the drop in DnB ASA's long position.| Kid ASA vs. Europris ASA | Kid ASA vs. Selvaag Bolig ASA | Kid ASA vs. Storebrand ASA | Kid ASA vs. Kitron ASA |
| DnB ASA vs. Telenor ASA | DnB ASA vs. Storebrand ASA | DnB ASA vs. Orkla ASA | DnB ASA vs. Gjensidige Forsikring 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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |