Correlation Between Kongsberg Gruppen and Waste Plastic
Can any of the company-specific risk be diversified away by investing in both Kongsberg Gruppen and Waste Plastic 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 Waste Plastic 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 Waste Plastic Upcycling, you can compare the effects of market volatilities on Kongsberg Gruppen and Waste Plastic 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 Waste Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kongsberg Gruppen and Waste Plastic.
Diversification Opportunities for Kongsberg Gruppen and Waste Plastic
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Kongsberg and Waste is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Kongsberg Gruppen ASA and Waste Plastic Upcycling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waste Plastic Upcycling 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 Waste Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waste Plastic Upcycling has no effect on the direction of Kongsberg Gruppen i.e., Kongsberg Gruppen and Waste Plastic go up and down completely randomly.
Pair Corralation between Kongsberg Gruppen and Waste Plastic
Assuming the 90 days trading horizon Kongsberg Gruppen ASA is expected to generate 0.47 times more return on investment than Waste Plastic. However, Kongsberg Gruppen ASA is 2.14 times less risky than Waste Plastic. It trades about 0.2 of its potential returns per unit of risk. Waste Plastic Upcycling is currently generating about -0.39 per unit of risk. If you would invest 115,400 in Kongsberg Gruppen ASA on September 12, 2024 and sell it today you would earn a total of 10,300 from holding Kongsberg Gruppen ASA or generate 8.93% 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. Waste Plastic Upcycling
Performance |
| Timeline |
| Kongsberg Gruppen ASA |
| Waste Plastic Upcycling |
Kongsberg Gruppen and Waste Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kongsberg Gruppen and Waste Plastic
The main advantage of trading using opposite Kongsberg Gruppen and Waste Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kongsberg Gruppen position performs unexpectedly, Waste Plastic 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 Waste Plastic will offset losses from the drop in Waste Plastic'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 |
| Waste Plastic vs. Vow Green Metals | Waste Plastic vs. Kongsberg Gruppen ASA | Waste Plastic vs. Napatech AS | Waste Plastic 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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