Correlation Between Kongsberg Gruppen and TietoEVRY Oyj
Can any of the company-specific risk be diversified away by investing in both Kongsberg Gruppen and TietoEVRY Oyj 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 TietoEVRY Oyj 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 TietoEVRY Oyj, you can compare the effects of market volatilities on Kongsberg Gruppen and TietoEVRY Oyj 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 TietoEVRY Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kongsberg Gruppen and TietoEVRY Oyj.
Diversification Opportunities for Kongsberg Gruppen and TietoEVRY Oyj
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kongsberg and TietoEVRY is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Kongsberg Gruppen ASA and TietoEVRY Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TietoEVRY Oyj 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 TietoEVRY Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TietoEVRY Oyj has no effect on the direction of Kongsberg Gruppen i.e., Kongsberg Gruppen and TietoEVRY Oyj go up and down completely randomly.
Pair Corralation between Kongsberg Gruppen and TietoEVRY Oyj
Assuming the 90 days trading horizon Kongsberg Gruppen ASA is expected to generate 1.18 times more return on investment than TietoEVRY Oyj. However, Kongsberg Gruppen is 1.18 times more volatile than TietoEVRY Oyj. It trades about 0.14 of its potential returns per unit of risk. TietoEVRY Oyj is currently generating about -0.03 per unit of risk. If you would invest 40,215 in Kongsberg Gruppen ASA on September 15, 2024 and sell it today you would earn a total of 88,385 from holding Kongsberg Gruppen ASA or generate 219.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kongsberg Gruppen ASA vs. TietoEVRY Oyj
Performance |
| Timeline |
| Kongsberg Gruppen ASA |
| TietoEVRY Oyj |
Kongsberg Gruppen and TietoEVRY Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kongsberg Gruppen and TietoEVRY Oyj
The main advantage of trading using opposite Kongsberg Gruppen and TietoEVRY Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kongsberg Gruppen position performs unexpectedly, TietoEVRY Oyj 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 TietoEVRY Oyj will offset losses from the drop in TietoEVRY Oyj's long position.| Kongsberg Gruppen vs. DnB ASA | Kongsberg Gruppen vs. Orkla ASA | Kongsberg Gruppen vs. Storebrand ASA | Kongsberg Gruppen vs. Yara International ASA |
| TietoEVRY Oyj vs. Huddlestock Fintech As | TietoEVRY Oyj vs. Xplora Technologies As | TietoEVRY Oyj vs. Polight ASA | TietoEVRY Oyj 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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