Correlation Between Kongsberg Gruppen and Scatec Solar
Can any of the company-specific risk be diversified away by investing in both Kongsberg Gruppen and Scatec Solar 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 Scatec Solar 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 Scatec Solar OL, you can compare the effects of market volatilities on Kongsberg Gruppen and Scatec Solar 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 Scatec Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kongsberg Gruppen and Scatec Solar.
Diversification Opportunities for Kongsberg Gruppen and Scatec Solar
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kongsberg and Scatec is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Kongsberg Gruppen ASA and Scatec Solar OL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scatec Solar OL 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 Scatec Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scatec Solar OL has no effect on the direction of Kongsberg Gruppen i.e., Kongsberg Gruppen and Scatec Solar go up and down completely randomly.
Pair Corralation between Kongsberg Gruppen and Scatec Solar
Assuming the 90 days trading horizon Kongsberg Gruppen ASA is expected to generate 0.77 times more return on investment than Scatec Solar. However, Kongsberg Gruppen ASA is 1.29 times less risky than Scatec Solar. It trades about 0.22 of its potential returns per unit of risk. Scatec Solar OL is currently generating about 0.02 per unit of risk. If you would invest 45,649 in Kongsberg Gruppen ASA on September 14, 2024 and sell it today you would earn a total of 84,151 from holding Kongsberg Gruppen ASA or generate 184.34% 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. Scatec Solar OL
Performance |
| Timeline |
| Kongsberg Gruppen ASA |
| Scatec Solar OL |
Kongsberg Gruppen and Scatec Solar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kongsberg Gruppen and Scatec Solar
The main advantage of trading using opposite Kongsberg Gruppen and Scatec Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kongsberg Gruppen position performs unexpectedly, Scatec Solar 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 Scatec Solar will offset losses from the drop in Scatec Solar's long position.| Kongsberg Gruppen vs. DnB ASA | Kongsberg Gruppen vs. Orkla ASA | Kongsberg Gruppen vs. Storebrand ASA | Kongsberg Gruppen vs. Yara International 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |