Correlation Between Multiconsult and Veidekke ASA
Can any of the company-specific risk be diversified away by investing in both Multiconsult and Veidekke 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 Veidekke 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 Veidekke ASA, you can compare the effects of market volatilities on Multiconsult and Veidekke 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 Veidekke ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multiconsult and Veidekke ASA.
Diversification Opportunities for Multiconsult and Veidekke ASA
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Multiconsult and Veidekke is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Multiconsult AS and Veidekke ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Veidekke 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 Veidekke ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Veidekke ASA has no effect on the direction of Multiconsult i.e., Multiconsult and Veidekke ASA go up and down completely randomly.
Pair Corralation between Multiconsult and Veidekke ASA
Assuming the 90 days trading horizon Multiconsult AS is expected to generate 1.38 times more return on investment than Veidekke ASA. However, Multiconsult is 1.38 times more volatile than Veidekke ASA. It trades about 0.23 of its potential returns per unit of risk. Veidekke ASA is currently generating about -0.06 per unit of risk. If you would invest 19,050 in Multiconsult AS on October 20, 2024 and sell it today you would earn a total of 650.00 from holding Multiconsult AS or generate 3.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multiconsult AS vs. Veidekke ASA
Performance |
| Timeline |
| Multiconsult AS |
| Veidekke ASA |
Multiconsult and Veidekke ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multiconsult and Veidekke ASA
The main advantage of trading using opposite Multiconsult and Veidekke ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multiconsult position performs unexpectedly, Veidekke 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 Veidekke ASA will offset losses from the drop in Veidekke ASA's long position.| Multiconsult vs. Kitron ASA | Multiconsult vs. Veidekke ASA | Multiconsult vs. Europris ASA | Multiconsult vs. AF Gruppen ASA |
| Veidekke ASA vs. AF Gruppen ASA | Veidekke ASA vs. Gjensidige Forsikring ASA | Veidekke ASA vs. Storebrand ASA | Veidekke ASA vs. Orkla 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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