Correlation Between Kitron ASA and Webstep ASA
Can any of the company-specific risk be diversified away by investing in both Kitron ASA and Webstep 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 Webstep 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 Webstep ASA, you can compare the effects of market volatilities on Kitron ASA and Webstep 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 Webstep ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kitron ASA and Webstep ASA.
Diversification Opportunities for Kitron ASA and Webstep ASA
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kitron and Webstep is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Kitron ASA and Webstep ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Webstep 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 Webstep ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Webstep ASA has no effect on the direction of Kitron ASA i.e., Kitron ASA and Webstep ASA go up and down completely randomly.
Pair Corralation between Kitron ASA and Webstep ASA
Assuming the 90 days trading horizon Kitron ASA is expected to generate 1.09 times more return on investment than Webstep ASA. However, Kitron ASA is 1.09 times more volatile than Webstep ASA. It trades about 0.03 of its potential returns per unit of risk. Webstep ASA is currently generating about 0.03 per unit of risk. If you would invest 2,521 in Kitron ASA on September 3, 2024 and sell it today you would earn a total of 629.00 from holding Kitron ASA or generate 24.95% 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. Webstep ASA
Performance |
| Timeline |
| Kitron ASA |
| Webstep ASA |
Kitron ASA and Webstep ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kitron ASA and Webstep ASA
The main advantage of trading using opposite Kitron ASA and Webstep ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kitron ASA position performs unexpectedly, Webstep 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 Webstep ASA will offset losses from the drop in Webstep 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 |
| Webstep ASA vs. Kitron ASA | Webstep ASA vs. Europris ASA | Webstep ASA vs. Kid ASA | Webstep ASA vs. Atea 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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