Correlation Between Kongsberg Gruppen and Helgeland Sparebank
Can any of the company-specific risk be diversified away by investing in both Kongsberg Gruppen and Helgeland Sparebank 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 Helgeland Sparebank 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 Helgeland Sparebank, you can compare the effects of market volatilities on Kongsberg Gruppen and Helgeland Sparebank 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 Helgeland Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kongsberg Gruppen and Helgeland Sparebank.
Diversification Opportunities for Kongsberg Gruppen and Helgeland Sparebank
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kongsberg and Helgeland is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Kongsberg Gruppen ASA and Helgeland Sparebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Helgeland Sparebank 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 Helgeland Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Helgeland Sparebank has no effect on the direction of Kongsberg Gruppen i.e., Kongsberg Gruppen and Helgeland Sparebank go up and down completely randomly.
Pair Corralation between Kongsberg Gruppen and Helgeland Sparebank
Assuming the 90 days trading horizon Kongsberg Gruppen ASA is expected to generate 1.15 times more return on investment than Helgeland Sparebank. However, Kongsberg Gruppen is 1.15 times more volatile than Helgeland Sparebank. It trades about 0.14 of its potential returns per unit of risk. Helgeland Sparebank is currently generating about 0.06 per unit of risk. If you would invest 40,215 in Kongsberg Gruppen ASA on September 14, 2024 and sell it today you would earn a total of 89,585 from holding Kongsberg Gruppen ASA or generate 222.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Kongsberg Gruppen ASA vs. Helgeland Sparebank
Performance |
| Timeline |
| Kongsberg Gruppen ASA |
| Helgeland Sparebank |
Kongsberg Gruppen and Helgeland Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kongsberg Gruppen and Helgeland Sparebank
The main advantage of trading using opposite Kongsberg Gruppen and Helgeland Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kongsberg Gruppen position performs unexpectedly, Helgeland Sparebank 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 Helgeland Sparebank will offset losses from the drop in Helgeland Sparebank's long position.| Kongsberg Gruppen vs. DnB ASA | Kongsberg Gruppen vs. Orkla ASA | Kongsberg Gruppen vs. Storebrand ASA | Kongsberg Gruppen vs. Yara International ASA |
| Helgeland Sparebank vs. Aurskog Sparebank | Helgeland Sparebank vs. Kongsberg Gruppen ASA | Helgeland Sparebank vs. Napatech AS | Helgeland Sparebank vs. Elkem 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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