Correlation Between Napatech and HAV Group
Can any of the company-specific risk be diversified away by investing in both Napatech and HAV Group 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 HAV Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Napatech AS and HAV Group ASA, you can compare the effects of market volatilities on Napatech and HAV Group 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 HAV Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Napatech and HAV Group.
Diversification Opportunities for Napatech and HAV Group
Poor diversification
The 3 months correlation between Napatech and HAV is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Napatech AS and HAV Group ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HAV Group ASA 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 HAV Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HAV Group ASA has no effect on the direction of Napatech i.e., Napatech and HAV Group go up and down completely randomly.
Pair Corralation between Napatech and HAV Group
Assuming the 90 days trading horizon Napatech AS is expected to generate 0.5 times more return on investment than HAV Group. However, Napatech AS is 2.02 times less risky than HAV Group. It trades about -0.31 of its potential returns per unit of risk. HAV Group ASA is currently generating about -0.31 per unit of risk. If you would invest 2,760 in Napatech AS on September 1, 2024 and sell it today you would lose (360.00) from holding Napatech AS or give up 13.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Napatech AS vs. HAV Group ASA
Performance |
| Timeline |
| Napatech AS |
| HAV Group ASA |
Napatech and HAV Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Napatech and HAV Group
The main advantage of trading using opposite Napatech and HAV Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Napatech position performs unexpectedly, HAV Group 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 HAV Group will offset losses from the drop in HAV Group's long position.| Napatech vs. Idex ASA | Napatech vs. Next Biometrics Group | Napatech vs. Polight ASA | Napatech vs. Kitron ASA |
| HAV Group vs. Havila Shipping ASA | HAV Group vs. Shelf Drilling | HAV Group vs. Solstad Offsho | HAV Group vs. Eidesvik Offshore 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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