Correlation Between Kraft Bank and Horisont Energi
Can any of the company-specific risk be diversified away by investing in both Kraft Bank and Horisont Energi 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 Kraft Bank and Horisont Energi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kraft Bank Asa and Horisont Energi AS, you can compare the effects of market volatilities on Kraft Bank and Horisont Energi 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 Kraft Bank with a short position of Horisont Energi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kraft Bank and Horisont Energi.
Diversification Opportunities for Kraft Bank and Horisont Energi
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kraft and Horisont is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Kraft Bank Asa and Horisont Energi AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horisont Energi AS and Kraft Bank 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 Kraft Bank Asa are associated (or correlated) with Horisont Energi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Horisont Energi AS has no effect on the direction of Kraft Bank i.e., Kraft Bank and Horisont Energi go up and down completely randomly.
Pair Corralation between Kraft Bank and Horisont Energi
Assuming the 90 days trading horizon Kraft Bank Asa is expected to generate 0.27 times more return on investment than Horisont Energi. However, Kraft Bank Asa is 3.7 times less risky than Horisont Energi. It trades about -0.22 of its potential returns per unit of risk. Horisont Energi AS is currently generating about -0.17 per unit of risk. If you would invest 860.00 in Kraft Bank Asa on November 3, 2024 and sell it today you would lose (30.00) from holding Kraft Bank Asa or give up 3.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kraft Bank Asa vs. Horisont Energi AS
Performance |
| Timeline |
| Kraft Bank Asa |
| Horisont Energi AS |
Kraft Bank and Horisont Energi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kraft Bank and Horisont Energi
The main advantage of trading using opposite Kraft Bank and Horisont Energi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kraft Bank position performs unexpectedly, Horisont Energi 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 Horisont Energi will offset losses from the drop in Horisont Energi's long position.| Kraft Bank vs. Shelf Drilling | Kraft Bank vs. Helgeland Sparebank | Kraft Bank vs. Nordic Mining ASA | Kraft Bank vs. Clean Seas Seafood |
| Horisont Energi vs. Romerike Sparebank | Horisont Energi vs. BW Offshore | Horisont Energi vs. Morrow Bank ASA | Horisont Energi vs. 5Th Planet Games |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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