Correlation Between Kongsberg Gruppen and Shelf Drilling
Can any of the company-specific risk be diversified away by investing in both Kongsberg Gruppen and Shelf Drilling 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 Shelf Drilling 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 Shelf Drilling, you can compare the effects of market volatilities on Kongsberg Gruppen and Shelf Drilling 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 Shelf Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kongsberg Gruppen and Shelf Drilling.
Diversification Opportunities for Kongsberg Gruppen and Shelf Drilling
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Kongsberg and Shelf is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Kongsberg Gruppen ASA and Shelf Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shelf Drilling 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 Shelf Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shelf Drilling has no effect on the direction of Kongsberg Gruppen i.e., Kongsberg Gruppen and Shelf Drilling go up and down completely randomly.
Pair Corralation between Kongsberg Gruppen and Shelf Drilling
Assuming the 90 days trading horizon Kongsberg Gruppen ASA is expected to generate 0.25 times more return on investment than Shelf Drilling. However, Kongsberg Gruppen ASA is 3.93 times less risky than Shelf Drilling. It trades about 0.16 of its potential returns per unit of risk. Shelf Drilling is currently generating about -0.17 per unit of risk. If you would invest 121,100 in Kongsberg Gruppen ASA on September 15, 2024 and sell it today you would earn a total of 7,500 from holding Kongsberg Gruppen ASA or generate 6.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kongsberg Gruppen ASA vs. Shelf Drilling
Performance |
| Timeline |
| Kongsberg Gruppen ASA |
| Shelf Drilling |
Kongsberg Gruppen and Shelf Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kongsberg Gruppen and Shelf Drilling
The main advantage of trading using opposite Kongsberg Gruppen and Shelf Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kongsberg Gruppen position performs unexpectedly, Shelf Drilling 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 Shelf Drilling will offset losses from the drop in Shelf Drilling's long position.| Kongsberg Gruppen vs. DnB ASA | Kongsberg Gruppen vs. Orkla ASA | Kongsberg Gruppen vs. Storebrand ASA | Kongsberg Gruppen vs. Yara International ASA |
| Shelf Drilling vs. Odfjell Drilling | Shelf Drilling vs. Borr Drilling | Shelf Drilling vs. Solstad Offsho | Shelf Drilling vs. Kongsberg Automotive Holding |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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