Correlation Between Napatech and Storebrand ASA
Can any of the company-specific risk be diversified away by investing in both Napatech and Storebrand ASA 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 Storebrand ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Napatech AS and Storebrand ASA, you can compare the effects of market volatilities on Napatech and Storebrand ASA 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 Storebrand ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Napatech and Storebrand ASA.
Diversification Opportunities for Napatech and Storebrand ASA
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Napatech and Storebrand is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Napatech AS and Storebrand ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Storebrand 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 Storebrand ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Storebrand ASA has no effect on the direction of Napatech i.e., Napatech and Storebrand ASA go up and down completely randomly.
Pair Corralation between Napatech and Storebrand ASA
Assuming the 90 days trading horizon Napatech AS is expected to generate 3.01 times more return on investment than Storebrand ASA. However, Napatech is 3.01 times more volatile than Storebrand ASA. It trades about 0.06 of its potential returns per unit of risk. Storebrand ASA is currently generating about 0.08 per unit of risk. If you would invest 1,382 in Napatech AS on October 7, 2024 and sell it today you would earn a total of 1,378 from holding Napatech AS or generate 99.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Napatech AS vs. Storebrand ASA
Performance |
| Timeline |
| Napatech AS |
| Storebrand ASA |
Napatech and Storebrand ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Napatech and Storebrand ASA
The main advantage of trading using opposite Napatech and Storebrand ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Napatech position performs unexpectedly, Storebrand ASA 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 Storebrand ASA will offset losses from the drop in Storebrand ASA's long position.| Napatech vs. Idex ASA | Napatech vs. Next Biometrics Group | Napatech vs. Polight ASA | Napatech vs. Kitron ASA |
| Storebrand ASA vs. Sparebank 1 Nord Norge | Storebrand ASA vs. Aurskog Sparebank | Storebrand ASA vs. Helgeland Sparebank | Storebrand ASA vs. Elkem 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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