Correlation Between Kongsberg Gruppen and Havila Shipping
Can any of the company-specific risk be diversified away by investing in both Kongsberg Gruppen 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 Kongsberg Gruppen and Havila Shipping into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kongsberg Gruppen ASA and Havila Shipping ASA, you can compare the effects of market volatilities on Kongsberg Gruppen 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 Kongsberg Gruppen with a short position of Havila Shipping. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kongsberg Gruppen and Havila Shipping.
Diversification Opportunities for Kongsberg Gruppen and Havila Shipping
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Kongsberg and Havila is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Kongsberg Gruppen 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 Kongsberg Gruppen 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 Kongsberg Gruppen 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 Kongsberg Gruppen i.e., Kongsberg Gruppen and Havila Shipping go up and down completely randomly.
Pair Corralation between Kongsberg Gruppen and Havila Shipping
Assuming the 90 days trading horizon Kongsberg Gruppen ASA is expected to generate 0.63 times more return on investment than Havila Shipping. However, Kongsberg Gruppen ASA is 1.59 times less risky than Havila Shipping. It trades about 0.29 of its potential returns per unit of risk. Havila Shipping ASA is currently generating about -0.15 per unit of risk. If you would invest 114,500 in Kongsberg Gruppen ASA on September 1, 2024 and sell it today you would earn a total of 15,400 from holding Kongsberg Gruppen ASA or generate 13.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kongsberg Gruppen ASA vs. Havila Shipping ASA
Performance |
| Timeline |
| Kongsberg Gruppen ASA |
| Havila Shipping ASA |
Kongsberg Gruppen and Havila Shipping Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kongsberg Gruppen and Havila Shipping
The main advantage of trading using opposite Kongsberg Gruppen and Havila Shipping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kongsberg Gruppen 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.| Kongsberg Gruppen vs. DnB ASA | Kongsberg Gruppen vs. Orkla ASA | Kongsberg Gruppen vs. Storebrand ASA | Kongsberg Gruppen vs. Yara International ASA |
| Havila Shipping vs. Solstad Offsho | Havila Shipping vs. Eidesvik Offshore ASA | Havila Shipping vs. Prosafe SE | Havila Shipping vs. BW Offshore |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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