Correlation Between Kongsberg Gruppen and TGS NOPEC
Can any of the company-specific risk be diversified away by investing in both Kongsberg Gruppen and TGS NOPEC 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 TGS NOPEC 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 TGS NOPEC Geophysical, you can compare the effects of market volatilities on Kongsberg Gruppen and TGS NOPEC 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 TGS NOPEC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kongsberg Gruppen and TGS NOPEC.
Diversification Opportunities for Kongsberg Gruppen and TGS NOPEC
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kongsberg and TGS is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Kongsberg Gruppen ASA and TGS NOPEC Geophysical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TGS NOPEC Geophysical 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 TGS NOPEC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TGS NOPEC Geophysical has no effect on the direction of Kongsberg Gruppen i.e., Kongsberg Gruppen and TGS NOPEC go up and down completely randomly.
Pair Corralation between Kongsberg Gruppen and TGS NOPEC
Assuming the 90 days trading horizon Kongsberg Gruppen ASA is expected to generate 0.76 times more return on investment than TGS NOPEC. However, Kongsberg Gruppen ASA is 1.31 times less risky than TGS NOPEC. It trades about 0.22 of its potential returns per unit of risk. TGS NOPEC Geophysical is currently generating about 0.0 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 Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kongsberg Gruppen ASA vs. TGS NOPEC Geophysical
Performance |
| Timeline |
| Kongsberg Gruppen ASA |
| TGS NOPEC Geophysical |
Kongsberg Gruppen and TGS NOPEC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kongsberg Gruppen and TGS NOPEC
The main advantage of trading using opposite Kongsberg Gruppen and TGS NOPEC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kongsberg Gruppen position performs unexpectedly, TGS NOPEC 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 TGS NOPEC will offset losses from the drop in TGS NOPEC's long position.| Kongsberg Gruppen vs. DnB ASA | Kongsberg Gruppen vs. Orkla ASA | Kongsberg Gruppen vs. Storebrand ASA | Kongsberg Gruppen vs. Yara International ASA |
| TGS NOPEC vs. Solstad Offsho | TGS NOPEC vs. Prosafe SE | TGS NOPEC vs. BW Offshore | TGS NOPEC vs. Kongsberg Gruppen 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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