Correlation Between Multiconsult and Kitron ASA
Can any of the company-specific risk be diversified away by investing in both Multiconsult and Kitron 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 Multiconsult and Kitron ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multiconsult AS and Kitron ASA, you can compare the effects of market volatilities on Multiconsult and Kitron 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 Multiconsult with a short position of Kitron ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multiconsult and Kitron ASA.
Diversification Opportunities for Multiconsult and Kitron ASA
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Multiconsult and Kitron is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Multiconsult AS and Kitron ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kitron ASA and Multiconsult 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 Multiconsult AS are associated (or correlated) with Kitron ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kitron ASA has no effect on the direction of Multiconsult i.e., Multiconsult and Kitron ASA go up and down completely randomly.
Pair Corralation between Multiconsult and Kitron ASA
Assuming the 90 days trading horizon Multiconsult AS is expected to generate 0.84 times more return on investment than Kitron ASA. However, Multiconsult AS is 1.2 times less risky than Kitron ASA. It trades about 0.04 of its potential returns per unit of risk. Kitron ASA is currently generating about 0.03 per unit of risk. If you would invest 13,890 in Multiconsult AS on November 27, 2024 and sell it today you would earn a total of 5,010 from holding Multiconsult AS or generate 36.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multiconsult AS vs. Kitron ASA
Performance |
| Timeline |
| Multiconsult AS |
| Kitron ASA |
Multiconsult and Kitron ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multiconsult and Kitron ASA
The main advantage of trading using opposite Multiconsult and Kitron ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multiconsult position performs unexpectedly, Kitron 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 Kitron ASA will offset losses from the drop in Kitron ASA's long position.| Multiconsult vs. Kitron ASA | Multiconsult vs. Veidekke ASA | Multiconsult vs. Europris ASA | Multiconsult vs. AF Gruppen ASA |
| Kitron ASA vs. Europris ASA | Kitron ASA vs. Kongsberg Gruppen ASA | Kitron ASA vs. Nordic Semiconductor ASA | Kitron ASA vs. Storebrand 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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