Correlation Between Kongsberg Gruppen and Schibsted ASA
Can any of the company-specific risk be diversified away by investing in both Kongsberg Gruppen and Schibsted ASA 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 Schibsted ASA 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 Schibsted ASA B, you can compare the effects of market volatilities on Kongsberg Gruppen and Schibsted ASA 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 Schibsted ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kongsberg Gruppen and Schibsted ASA.
Diversification Opportunities for Kongsberg Gruppen and Schibsted ASA
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kongsberg and Schibsted is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Kongsberg Gruppen ASA and Schibsted ASA B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schibsted ASA B 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 Schibsted ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schibsted ASA B has no effect on the direction of Kongsberg Gruppen i.e., Kongsberg Gruppen and Schibsted ASA go up and down completely randomly.
Pair Corralation between Kongsberg Gruppen and Schibsted ASA
Assuming the 90 days trading horizon Kongsberg Gruppen ASA is expected to generate 1.14 times more return on investment than Schibsted ASA. However, Kongsberg Gruppen is 1.14 times more volatile than Schibsted ASA B. It trades about 0.21 of its potential returns per unit of risk. Schibsted ASA B is currently generating about -0.01 per unit of risk. If you would invest 118,500 in Kongsberg Gruppen ASA on September 13, 2024 and sell it today you would earn a total of 11,300 from holding Kongsberg Gruppen ASA or generate 9.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kongsberg Gruppen ASA vs. Schibsted ASA B
Performance |
| Timeline |
| Kongsberg Gruppen ASA |
| Schibsted ASA B |
Kongsberg Gruppen and Schibsted ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kongsberg Gruppen and Schibsted ASA
The main advantage of trading using opposite Kongsberg Gruppen and Schibsted ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kongsberg Gruppen position performs unexpectedly, Schibsted ASA 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 Schibsted ASA will offset losses from the drop in Schibsted ASA's long position.| Kongsberg Gruppen vs. DnB ASA | Kongsberg Gruppen vs. Orkla ASA | Kongsberg Gruppen vs. Storebrand ASA | Kongsberg Gruppen vs. Yara International ASA |
| Schibsted ASA vs. Nordic Mining ASA | Schibsted ASA vs. Eidesvik Offshore ASA | Schibsted ASA vs. Sea1 Offshore | Schibsted ASA vs. SD Standard Drilling |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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