Correlation Between Kongsberg Gruppen and Vow Green
Can any of the company-specific risk be diversified away by investing in both Kongsberg Gruppen and Vow Green 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 Vow Green 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 Vow Green Metals, you can compare the effects of market volatilities on Kongsberg Gruppen and Vow Green 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 Vow Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kongsberg Gruppen and Vow Green.
Diversification Opportunities for Kongsberg Gruppen and Vow Green
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kongsberg and Vow is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Kongsberg Gruppen ASA and Vow Green Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vow Green Metals 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 Vow Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vow Green Metals has no effect on the direction of Kongsberg Gruppen i.e., Kongsberg Gruppen and Vow Green go up and down completely randomly.
Pair Corralation between Kongsberg Gruppen and Vow Green
Assuming the 90 days trading horizon Kongsberg Gruppen ASA is expected to generate 0.36 times more return on investment than Vow Green. However, Kongsberg Gruppen ASA is 2.8 times less risky than Vow Green. It trades about 0.14 of its potential returns per unit of risk. Vow Green Metals is currently generating about -0.02 per unit of risk. If you would invest 39,754 in Kongsberg Gruppen ASA on September 12, 2024 and sell it today you would earn a total of 85,946 from holding Kongsberg Gruppen ASA or generate 216.19% 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. Vow Green Metals
Performance |
| Timeline |
| Kongsberg Gruppen ASA |
| Vow Green Metals |
Kongsberg Gruppen and Vow Green Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kongsberg Gruppen and Vow Green
The main advantage of trading using opposite Kongsberg Gruppen and Vow Green positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kongsberg Gruppen position performs unexpectedly, Vow Green 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 Vow Green will offset losses from the drop in Vow Green's long position.| Kongsberg Gruppen vs. Eidesvik Offshore ASA | Kongsberg Gruppen vs. Kitron ASA | Kongsberg Gruppen vs. Havila Shipping ASA | Kongsberg Gruppen vs. Arendals Fossekompani ASA |
| Vow Green vs. Waste Plastic Upcycling | Vow Green vs. Kongsberg Gruppen ASA | Vow Green vs. Napatech AS | Vow Green vs. Elkem 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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