Correlation Between Kid ASA and Multiconsult
Can any of the company-specific risk be diversified away by investing in both Kid ASA and Multiconsult 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 Multiconsult into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kid ASA and Multiconsult AS, you can compare the effects of market volatilities on Kid ASA and Multiconsult 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 Multiconsult. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kid ASA and Multiconsult.
Diversification Opportunities for Kid ASA and Multiconsult
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kid and Multiconsult is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Kid ASA and Multiconsult AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multiconsult AS 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 Multiconsult. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multiconsult AS has no effect on the direction of Kid ASA i.e., Kid ASA and Multiconsult go up and down completely randomly.
Pair Corralation between Kid ASA and Multiconsult
Assuming the 90 days trading horizon Kid ASA is expected to generate 1.08 times more return on investment than Multiconsult. However, Kid ASA is 1.08 times more volatile than Multiconsult AS. It trades about 0.08 of its potential returns per unit of risk. Multiconsult AS is currently generating about 0.04 per unit of risk. If you would invest 7,605 in Kid ASA on November 27, 2024 and sell it today you would earn a total of 6,815 from holding Kid ASA or generate 89.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kid ASA vs. Multiconsult AS
Performance |
| Timeline |
| Kid ASA |
| Multiconsult AS |
Kid ASA and Multiconsult Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kid ASA and Multiconsult
The main advantage of trading using opposite Kid ASA and Multiconsult positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kid ASA position performs unexpectedly, Multiconsult 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 Multiconsult will offset losses from the drop in Multiconsult's long position.| Kid ASA vs. Europris ASA | Kid ASA vs. Selvaag Bolig ASA | Kid ASA vs. Storebrand ASA | Kid ASA vs. Kitron ASA |
| Multiconsult vs. Kitron ASA | Multiconsult vs. Veidekke ASA | Multiconsult vs. Europris ASA | Multiconsult vs. AF Gruppen 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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