Correlation Between Kongsberg Gruppen and Huddly AS
Can any of the company-specific risk be diversified away by investing in both Kongsberg Gruppen and Huddly AS 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 Huddly AS 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 Huddly AS, you can compare the effects of market volatilities on Kongsberg Gruppen and Huddly AS 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 Huddly AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kongsberg Gruppen and Huddly AS.
Diversification Opportunities for Kongsberg Gruppen and Huddly AS
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kongsberg and Huddly is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Kongsberg Gruppen ASA and Huddly AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huddly AS 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 Huddly AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huddly AS has no effect on the direction of Kongsberg Gruppen i.e., Kongsberg Gruppen and Huddly AS go up and down completely randomly.
Pair Corralation between Kongsberg Gruppen and Huddly AS
Assuming the 90 days trading horizon Kongsberg Gruppen ASA is expected to under-perform the Huddly AS. But the stock apears to be less risky and, when comparing its historical volatility, Kongsberg Gruppen ASA is 6.14 times less risky than Huddly AS. The stock trades about -0.09 of its potential returns per unit of risk. The Huddly AS is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 17.00 in Huddly AS on October 20, 2024 and sell it today you would earn a total of 7.00 from holding Huddly AS or generate 41.18% 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. Huddly AS
Performance |
| Timeline |
| Kongsberg Gruppen ASA |
| Huddly AS |
Kongsberg Gruppen and Huddly AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kongsberg Gruppen and Huddly AS
The main advantage of trading using opposite Kongsberg Gruppen and Huddly AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kongsberg Gruppen position performs unexpectedly, Huddly AS 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 Huddly AS will offset losses from the drop in Huddly AS's long position.| Kongsberg Gruppen vs. DnB ASA | Kongsberg Gruppen vs. Orkla ASA | Kongsberg Gruppen vs. Storebrand ASA | Kongsberg Gruppen vs. Yara International ASA |
| Huddly AS vs. Pexip Holding ASA | Huddly AS vs. Airthings ASA | Huddly AS vs. Aker Horizons AS | Huddly AS vs. Cambi 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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