Correlation Between Kitron ASA and SalMar ASA
Can any of the company-specific risk be diversified away by investing in both Kitron ASA and SalMar 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 Kitron ASA and SalMar ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kitron ASA and SalMar ASA, you can compare the effects of market volatilities on Kitron ASA and SalMar 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 Kitron ASA with a short position of SalMar ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kitron ASA and SalMar ASA.
Diversification Opportunities for Kitron ASA and SalMar ASA
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kitron and SalMar is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Kitron ASA and SalMar ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SalMar 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 SalMar ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SalMar ASA has no effect on the direction of Kitron ASA i.e., Kitron ASA and SalMar ASA go up and down completely randomly.
Pair Corralation between Kitron ASA and SalMar ASA
Assuming the 90 days trading horizon Kitron ASA is expected to under-perform the SalMar ASA. In addition to that, Kitron ASA is 1.03 times more volatile than SalMar ASA. It trades about -0.04 of its total potential returns per unit of risk. SalMar ASA is currently generating about 0.08 per unit of volatility. If you would invest 53,100 in SalMar ASA on September 3, 2024 and sell it today you would earn a total of 4,300 from holding SalMar ASA or generate 8.1% 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. SalMar ASA
Performance |
| Timeline |
| Kitron ASA |
| SalMar ASA |
Kitron ASA and SalMar ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kitron ASA and SalMar ASA
The main advantage of trading using opposite Kitron ASA and SalMar ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kitron ASA position performs unexpectedly, SalMar 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 SalMar ASA will offset losses from the drop in SalMar ASA'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 |
| SalMar ASA vs. Lery Seafood Group | SalMar ASA vs. Grieg Seafood ASA | SalMar ASA vs. Pf Bakkafrost | SalMar ASA vs. Mowi 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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