Correlation Between Napatech and Akva
Can any of the company-specific risk be diversified away by investing in both Napatech and Akva 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 Napatech and Akva into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Napatech AS and Akva Group, you can compare the effects of market volatilities on Napatech and Akva 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 Napatech with a short position of Akva. Check out your portfolio center. Please also check ongoing floating volatility patterns of Napatech and Akva.
Diversification Opportunities for Napatech and Akva
Pay attention - limited upside
The 3 months correlation between Napatech and Akva is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Napatech AS and Akva Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akva Group and Napatech 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 Napatech AS are associated (or correlated) with Akva. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akva Group has no effect on the direction of Napatech i.e., Napatech and Akva go up and down completely randomly.
Pair Corralation between Napatech and Akva
Assuming the 90 days trading horizon Napatech AS is expected to generate 1.14 times more return on investment than Akva. However, Napatech is 1.14 times more volatile than Akva Group. It trades about 0.04 of its potential returns per unit of risk. Akva Group is currently generating about 0.03 per unit of risk. If you would invest 1,476 in Napatech AS on September 3, 2024 and sell it today you would earn a total of 924.00 from holding Napatech AS or generate 62.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Napatech AS vs. Akva Group
Performance |
| Timeline |
| Napatech AS |
| Akva Group |
Napatech and Akva Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Napatech and Akva
The main advantage of trading using opposite Napatech and Akva positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Napatech position performs unexpectedly, Akva 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 Akva will offset losses from the drop in Akva's long position.| Napatech vs. Idex ASA | Napatech vs. Next Biometrics Group | Napatech vs. Polight ASA | Napatech vs. Kitron ASA |
| Akva vs. Austevoll Seafood ASA | Akva vs. Grieg Seafood ASA | Akva vs. Lery Seafood Group | Akva vs. SalMar 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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