Correlation Between Kraft Bank and Tekna Holding
Can any of the company-specific risk be diversified away by investing in both Kraft Bank and Tekna Holding 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 Tekna Holding 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 Tekna Holding AS, you can compare the effects of market volatilities on Kraft Bank and Tekna Holding 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 Tekna Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kraft Bank and Tekna Holding.
Diversification Opportunities for Kraft Bank and Tekna Holding
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kraft and Tekna is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Kraft Bank Asa and Tekna Holding AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tekna Holding 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 Tekna Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tekna Holding AS has no effect on the direction of Kraft Bank i.e., Kraft Bank and Tekna Holding go up and down completely randomly.
Pair Corralation between Kraft Bank and Tekna Holding
Assuming the 90 days trading horizon Kraft Bank is expected to generate 1.73 times less return on investment than Tekna Holding. But when comparing it to its historical volatility, Kraft Bank Asa is 2.04 times less risky than Tekna Holding. It trades about 0.02 of its potential returns per unit of risk. Tekna Holding AS is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 610.00 in Tekna Holding AS on November 27, 2024 and sell it today you would lose (46.00) from holding Tekna Holding AS or give up 7.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Kraft Bank Asa vs. Tekna Holding AS
Performance |
| Timeline |
| Kraft Bank Asa |
| Tekna Holding AS |
Kraft Bank and Tekna Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kraft Bank and Tekna Holding
The main advantage of trading using opposite Kraft Bank and Tekna Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kraft Bank position performs unexpectedly, Tekna Holding 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 Tekna Holding will offset losses from the drop in Tekna Holding's long position.| Kraft Bank vs. Techstep ASA | Kraft Bank vs. Nidaros Sparebank | Kraft Bank vs. Sparebanken Ost | Kraft Bank vs. Norwegian Air Shuttle |
| Tekna Holding vs. Sogn Sparebank | Tekna Holding vs. Awilco Drilling PLC | Tekna Holding vs. Pareto Bank ASA | Tekna Holding vs. NorAm Drilling AS |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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