Correlation Between Napatech and Odfjell Technology
Can any of the company-specific risk be diversified away by investing in both Napatech and Odfjell Technology 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 Odfjell Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Napatech AS and Odfjell Technology, you can compare the effects of market volatilities on Napatech and Odfjell Technology 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 Odfjell Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Napatech and Odfjell Technology.
Diversification Opportunities for Napatech and Odfjell Technology
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Napatech and Odfjell is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Napatech AS and Odfjell Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Odfjell Technology 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 Odfjell Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Odfjell Technology has no effect on the direction of Napatech i.e., Napatech and Odfjell Technology go up and down completely randomly.
Pair Corralation between Napatech and Odfjell Technology
Assuming the 90 days trading horizon Napatech AS is expected to generate 1.99 times more return on investment than Odfjell Technology. However, Napatech is 1.99 times more volatile than Odfjell Technology. It trades about 0.02 of its potential returns per unit of risk. Odfjell Technology is currently generating about -0.06 per unit of risk. If you would invest 2,350 in Napatech AS on September 3, 2024 and sell it today you would earn a total of 50.00 from holding Napatech AS or generate 2.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Napatech AS vs. Odfjell Technology
Performance |
| Timeline |
| Napatech AS |
| Odfjell Technology |
Napatech and Odfjell Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Napatech and Odfjell Technology
The main advantage of trading using opposite Napatech and Odfjell Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Napatech position performs unexpectedly, Odfjell Technology 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 Odfjell Technology will offset losses from the drop in Odfjell Technology's long position.| Napatech vs. Idex ASA | Napatech vs. Next Biometrics Group | Napatech vs. Polight ASA | Napatech vs. Kitron ASA |
| Odfjell Technology vs. NorAm Drilling AS | Odfjell Technology vs. Awilco Drilling PLC | Odfjell Technology vs. Bien Sparebank ASA | Odfjell Technology vs. Kraft Bank 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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