Correlation Between Kitron ASA and Havila Shipping
Can any of the company-specific risk be diversified away by investing in both Kitron ASA and Havila Shipping 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 Kitron ASA and Havila Shipping into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kitron ASA and Havila Shipping ASA, you can compare the effects of market volatilities on Kitron ASA and Havila Shipping 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 Kitron ASA with a short position of Havila Shipping. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kitron ASA and Havila Shipping.
Diversification Opportunities for Kitron ASA and Havila Shipping
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kitron and Havila is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Kitron ASA and Havila Shipping ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Havila Shipping ASA and Kitron 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 Kitron ASA are associated (or correlated) with Havila Shipping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Havila Shipping ASA has no effect on the direction of Kitron ASA i.e., Kitron ASA and Havila Shipping go up and down completely randomly.
Pair Corralation between Kitron ASA and Havila Shipping
Assuming the 90 days trading horizon Kitron ASA is expected to generate 0.35 times more return on investment than Havila Shipping. However, Kitron ASA is 2.82 times less risky than Havila Shipping. It trades about 0.0 of its potential returns per unit of risk. Havila Shipping ASA is currently generating about -0.03 per unit of risk. If you would invest 3,263 in Kitron ASA on August 25, 2024 and sell it today you would lose (223.00) from holding Kitron ASA or give up 6.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kitron ASA vs. Havila Shipping ASA
Performance |
| Timeline |
| Kitron ASA |
| Havila Shipping ASA |
Kitron ASA and Havila Shipping Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kitron ASA and Havila Shipping
The main advantage of trading using opposite Kitron ASA and Havila Shipping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kitron ASA position performs unexpectedly, Havila Shipping 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 Havila Shipping will offset losses from the drop in Havila Shipping's long position.| Kitron ASA vs. Europris ASA | Kitron ASA vs. Kongsberg Gruppen ASA | Kitron ASA vs. Nordic Semiconductor ASA | Kitron ASA vs. Storebrand 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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