Correlation Between Net Insight and Karolinska Development
Can any of the company-specific risk be diversified away by investing in both Net Insight and Karolinska Development 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 Net Insight and Karolinska Development into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Net Insight AB and Karolinska Development AB, you can compare the effects of market volatilities on Net Insight and Karolinska Development 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 Net Insight with a short position of Karolinska Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Net Insight and Karolinska Development.
Diversification Opportunities for Net Insight and Karolinska Development
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Net and Karolinska is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Net Insight AB and Karolinska Development AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Karolinska Development and Net Insight 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 Net Insight AB are associated (or correlated) with Karolinska Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Karolinska Development has no effect on the direction of Net Insight i.e., Net Insight and Karolinska Development go up and down completely randomly.
Pair Corralation between Net Insight and Karolinska Development
Assuming the 90 days trading horizon Net Insight AB is expected to generate 0.69 times more return on investment than Karolinska Development. However, Net Insight AB is 1.46 times less risky than Karolinska Development. It trades about 0.01 of its potential returns per unit of risk. Karolinska Development AB is currently generating about -0.08 per unit of risk. If you would invest 697.00 in Net Insight AB on September 2, 2024 and sell it today you would earn a total of 4.00 from holding Net Insight AB or generate 0.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Net Insight AB vs. Karolinska Development AB
Performance |
| Timeline |
| Net Insight AB |
| Karolinska Development |
Net Insight and Karolinska Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Net Insight and Karolinska Development
The main advantage of trading using opposite Net Insight and Karolinska Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Net Insight position performs unexpectedly, Karolinska Development 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 Karolinska Development will offset losses from the drop in Karolinska Development's long position.| Net Insight vs. New Wave Group | Net Insight vs. Cantargia AB | Net Insight vs. Enea AB | Net Insight vs. Proact IT Group |
| Karolinska Development vs. Cantargia AB | Karolinska Development vs. BioArctic AB | Karolinska Development vs. Hansa Biopharma AB | Karolinska Development vs. BioInvent International AB |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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