Correlation Between Kongsberg Gruppen and Pexip Holding
Can any of the company-specific risk be diversified away by investing in both Kongsberg Gruppen and Pexip Holding 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 Pexip Holding 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 Pexip Holding ASA, you can compare the effects of market volatilities on Kongsberg Gruppen and Pexip Holding 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 Pexip Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kongsberg Gruppen and Pexip Holding.
Diversification Opportunities for Kongsberg Gruppen and Pexip Holding
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kongsberg and Pexip is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Kongsberg Gruppen ASA and Pexip Holding ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pexip Holding 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 Pexip Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pexip Holding ASA has no effect on the direction of Kongsberg Gruppen i.e., Kongsberg Gruppen and Pexip Holding go up and down completely randomly.
Pair Corralation between Kongsberg Gruppen and Pexip Holding
Assuming the 90 days trading horizon Kongsberg Gruppen is expected to generate 1.19 times less return on investment than Pexip Holding. But when comparing it to its historical volatility, Kongsberg Gruppen ASA is 1.69 times less risky than Pexip Holding. It trades about 0.14 of its potential returns per unit of risk. Pexip Holding ASA is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,281 in Pexip Holding ASA on September 14, 2024 and sell it today you would earn a total of 3,289 from holding Pexip Holding ASA or generate 256.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kongsberg Gruppen ASA vs. Pexip Holding ASA
Performance |
| Timeline |
| Kongsberg Gruppen ASA |
| Pexip Holding ASA |
Kongsberg Gruppen and Pexip Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kongsberg Gruppen and Pexip Holding
The main advantage of trading using opposite Kongsberg Gruppen and Pexip Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kongsberg Gruppen position performs unexpectedly, Pexip Holding 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 Pexip Holding will offset losses from the drop in Pexip Holding's long position.| Kongsberg Gruppen vs. DnB ASA | Kongsberg Gruppen vs. Orkla ASA | Kongsberg Gruppen vs. Storebrand ASA | Kongsberg Gruppen vs. Yara International ASA |
| Pexip Holding vs. XXL ASA | Pexip Holding vs. Nordic Semiconductor ASA | Pexip Holding vs. Aker Horizons AS | Pexip Holding vs. Atlantic Sapphire As |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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