Correlation Between Kitron ASA and North Energy
Can any of the company-specific risk be diversified away by investing in both Kitron ASA and North Energy 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 North Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kitron ASA and North Energy ASA, you can compare the effects of market volatilities on Kitron ASA and North Energy 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 North Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kitron ASA and North Energy.
Diversification Opportunities for Kitron ASA and North Energy
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kitron and North is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Kitron ASA and North Energy ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North Energy 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 North Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North Energy ASA has no effect on the direction of Kitron ASA i.e., Kitron ASA and North Energy go up and down completely randomly.
Pair Corralation between Kitron ASA and North Energy
Assuming the 90 days trading horizon Kitron ASA is expected to under-perform the North Energy. But the stock apears to be less risky and, when comparing its historical volatility, Kitron ASA is 1.05 times less risky than North Energy. The stock trades about 0.0 of its potential returns per unit of risk. The North Energy ASA is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 198.00 in North Energy ASA on August 25, 2024 and sell it today you would earn a total of 82.00 from holding North Energy ASA or generate 41.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kitron ASA vs. North Energy ASA
Performance |
| Timeline |
| Kitron ASA |
| North Energy ASA |
Kitron ASA and North Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kitron ASA and North Energy
The main advantage of trading using opposite Kitron ASA and North Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kitron ASA position performs unexpectedly, North Energy 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 North Energy will offset losses from the drop in North Energy'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 |
| North Energy vs. Polaris Media | North Energy vs. Sparebank 1 SMN | North Energy vs. Melhus Sparebank | North Energy vs. Helgeland Sparebank |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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