Correlation Between Kongsberg Gruppen and Ocean Sun
Can any of the company-specific risk be diversified away by investing in both Kongsberg Gruppen and Ocean Sun 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 Ocean Sun 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 Ocean Sun As, you can compare the effects of market volatilities on Kongsberg Gruppen and Ocean Sun 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 Ocean Sun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kongsberg Gruppen and Ocean Sun.
Diversification Opportunities for Kongsberg Gruppen and Ocean Sun
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kongsberg and Ocean is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Kongsberg Gruppen ASA and Ocean Sun As in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ocean Sun 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 Ocean Sun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ocean Sun As has no effect on the direction of Kongsberg Gruppen i.e., Kongsberg Gruppen and Ocean Sun go up and down completely randomly.
Pair Corralation between Kongsberg Gruppen and Ocean Sun
Assuming the 90 days trading horizon Kongsberg Gruppen ASA is expected to generate 0.4 times more return on investment than Ocean Sun. However, Kongsberg Gruppen ASA is 2.5 times less risky than Ocean Sun. It trades about 0.22 of its potential returns per unit of risk. Ocean Sun As is currently generating about -0.02 per unit of risk. If you would invest 115,400 in Kongsberg Gruppen ASA on September 12, 2024 and sell it today you would earn a total of 11,700 from holding Kongsberg Gruppen ASA or generate 10.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kongsberg Gruppen ASA vs. Ocean Sun As
Performance |
| Timeline |
| Kongsberg Gruppen ASA |
| Ocean Sun As |
Kongsberg Gruppen and Ocean Sun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kongsberg Gruppen and Ocean Sun
The main advantage of trading using opposite Kongsberg Gruppen and Ocean Sun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kongsberg Gruppen position performs unexpectedly, Ocean Sun 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 Ocean Sun will offset losses from the drop in Ocean Sun's long position.| Kongsberg Gruppen vs. Eidesvik Offshore ASA | Kongsberg Gruppen vs. Kitron ASA | Kongsberg Gruppen vs. Havila Shipping ASA | Kongsberg Gruppen vs. Arendals Fossekompani ASA |
| Ocean Sun vs. Bonheur | Ocean Sun vs. Kongsberg Gruppen ASA | Ocean Sun vs. Napatech AS | Ocean Sun 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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