Correlation Between Napatech and Horisont Energi
Can any of the company-specific risk be diversified away by investing in both Napatech and Horisont Energi 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 Horisont Energi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Napatech AS and Horisont Energi AS, you can compare the effects of market volatilities on Napatech and Horisont Energi 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 Horisont Energi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Napatech and Horisont Energi.
Diversification Opportunities for Napatech and Horisont Energi
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Napatech and Horisont is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Napatech AS and Horisont Energi AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horisont Energi AS 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 Horisont Energi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Horisont Energi AS has no effect on the direction of Napatech i.e., Napatech and Horisont Energi go up and down completely randomly.
Pair Corralation between Napatech and Horisont Energi
Assuming the 90 days trading horizon Napatech AS is expected to generate 0.75 times more return on investment than Horisont Energi. However, Napatech AS is 1.34 times less risky than Horisont Energi. It trades about 0.04 of its potential returns per unit of risk. Horisont Energi AS is currently generating about -0.09 per unit of risk. If you would invest 1,484 in Napatech AS on September 1, 2024 and sell it today you would earn a total of 916.00 from holding Napatech AS or generate 61.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Napatech AS vs. Horisont Energi AS
Performance |
| Timeline |
| Napatech AS |
| Horisont Energi AS |
Napatech and Horisont Energi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Napatech and Horisont Energi
The main advantage of trading using opposite Napatech and Horisont Energi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Napatech position performs unexpectedly, Horisont Energi 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 Horisont Energi will offset losses from the drop in Horisont Energi's long position.| Napatech vs. Idex ASA | Napatech vs. Next Biometrics Group | Napatech vs. Polight ASA | Napatech vs. Kitron ASA |
| Horisont Energi vs. Napatech AS | Horisont Energi vs. Nidaros Sparebank | Horisont Energi vs. Sparebanken Ost | Horisont Energi vs. Nordic Technology Group |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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