Correlation Between Napatech and Holand Og
Can any of the company-specific risk be diversified away by investing in both Napatech and Holand Og 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 Holand Og into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Napatech AS and Holand og Setskog, you can compare the effects of market volatilities on Napatech and Holand Og 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 Holand Og. Check out your portfolio center. Please also check ongoing floating volatility patterns of Napatech and Holand Og.
Diversification Opportunities for Napatech and Holand Og
Very good diversification
The 3 months correlation between Napatech and Holand is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Napatech AS and Holand og Setskog in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Holand og Setskog 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 Holand Og. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Holand og Setskog has no effect on the direction of Napatech i.e., Napatech and Holand Og go up and down completely randomly.
Pair Corralation between Napatech and Holand Og
Assuming the 90 days trading horizon Napatech AS is expected to under-perform the Holand Og. In addition to that, Napatech is 1.64 times more volatile than Holand og Setskog. It trades about -0.03 of its total potential returns per unit of risk. Holand og Setskog is currently generating about 0.29 per unit of volatility. If you would invest 13,150 in Holand og Setskog on October 22, 2024 and sell it today you would earn a total of 1,450 from holding Holand og Setskog or generate 11.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
Napatech AS vs. Holand og Setskog
Performance |
| Timeline |
| Napatech AS |
| Holand og Setskog |
Napatech and Holand Og Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Napatech and Holand Og
The main advantage of trading using opposite Napatech and Holand Og positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Napatech position performs unexpectedly, Holand Og 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 Holand Og will offset losses from the drop in Holand Og's long position.| Napatech vs. Idex ASA | Napatech vs. Next Biometrics Group | Napatech vs. Polight ASA | Napatech vs. Kitron ASA |
| Holand Og vs. Melhus Sparebank | Holand Og vs. Aurskog Sparebank | Holand Og vs. Sparebanken Sor | Holand Og vs. Sparebank 1 Ringerike |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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