Correlation Between Kraft Bank and Itera ASA
Can any of the company-specific risk be diversified away by investing in both Kraft Bank and Itera ASA 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 Itera ASA 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 Itera ASA, you can compare the effects of market volatilities on Kraft Bank and Itera ASA 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 Itera ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kraft Bank and Itera ASA.
Diversification Opportunities for Kraft Bank and Itera ASA
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kraft and Itera is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Kraft Bank Asa and Itera ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itera ASA 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 Itera ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Itera ASA has no effect on the direction of Kraft Bank i.e., Kraft Bank and Itera ASA go up and down completely randomly.
Pair Corralation between Kraft Bank and Itera ASA
Assuming the 90 days trading horizon Kraft Bank Asa is expected to generate 0.94 times more return on investment than Itera ASA. However, Kraft Bank Asa is 1.06 times less risky than Itera ASA. It trades about -0.02 of its potential returns per unit of risk. Itera ASA is currently generating about -0.22 per unit of risk. If you would invest 900.00 in Kraft Bank Asa on September 1, 2024 and sell it today you would lose (15.00) from holding Kraft Bank Asa or give up 1.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Kraft Bank Asa vs. Itera ASA
Performance |
| Timeline |
| Kraft Bank Asa |
| Itera ASA |
Kraft Bank and Itera ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kraft Bank and Itera ASA
The main advantage of trading using opposite Kraft Bank and Itera ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kraft Bank position performs unexpectedly, Itera ASA 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 Itera ASA will offset losses from the drop in Itera ASA's long position.| Kraft Bank vs. Romerike Sparebank | Kraft Bank vs. Nidaros Sparebank | Kraft Bank vs. Odfjell Drilling | Kraft Bank vs. Helgeland Sparebank |
| Itera ASA vs. Sogn Sparebank | Itera ASA vs. Nordic Technology Group | Itera ASA vs. SpareBank 1 stlandet | Itera ASA vs. Kraft Bank 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |