Correlation Between Kid ASA and Schibsted ASA
Can any of the company-specific risk be diversified away by investing in both Kid ASA and Schibsted 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 Schibsted 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 Schibsted ASA B, you can compare the effects of market volatilities on Kid ASA and Schibsted 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 Schibsted ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kid ASA and Schibsted ASA.
Diversification Opportunities for Kid ASA and Schibsted ASA
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kid and Schibsted is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Kid ASA and Schibsted ASA B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schibsted ASA B 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 Schibsted ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schibsted ASA B has no effect on the direction of Kid ASA i.e., Kid ASA and Schibsted ASA go up and down completely randomly.
Pair Corralation between Kid ASA and Schibsted ASA
Assuming the 90 days trading horizon Kid ASA is expected to under-perform the Schibsted ASA. But the stock apears to be less risky and, when comparing its historical volatility, Kid ASA is 1.04 times less risky than Schibsted ASA. The stock trades about -0.06 of its potential returns per unit of risk. The Schibsted ASA B is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 25,521 in Schibsted ASA B on August 25, 2024 and sell it today you would earn a total of 8,779 from holding Schibsted ASA B or generate 34.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kid ASA vs. Schibsted ASA B
Performance |
| Timeline |
| Kid ASA |
| Schibsted ASA B |
Kid ASA and Schibsted ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kid ASA and Schibsted ASA
The main advantage of trading using opposite Kid ASA and Schibsted ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kid ASA position performs unexpectedly, Schibsted 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 Schibsted ASA will offset losses from the drop in Schibsted 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 |
| Schibsted ASA vs. Kid ASA | Schibsted ASA vs. Kitron ASA | Schibsted ASA vs. Olav Thon Eien | Schibsted ASA vs. Elkem 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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