Correlation Between OMX Copenhagen and NKT AS
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By analyzing existing cross correlation between OMX Copenhagen All and NKT AS, you can compare the effects of market volatilities on OMX Copenhagen and NKT AS 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 OMX Copenhagen with a short position of NKT AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of OMX Copenhagen and NKT AS.
Diversification Opportunities for OMX Copenhagen and NKT AS
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between OMX and NKT is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding OMX Copenhagen All and NKT AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NKT AS and OMX Copenhagen 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 OMX Copenhagen All are associated (or correlated) with NKT AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NKT AS has no effect on the direction of OMX Copenhagen i.e., OMX Copenhagen and NKT AS go up and down completely randomly.
Pair Corralation between OMX Copenhagen and NKT AS
Assuming the 90 days trading horizon OMX Copenhagen is expected to generate 3.55 times less return on investment than NKT AS. But when comparing it to its historical volatility, OMX Copenhagen All is 1.63 times less risky than NKT AS. It trades about 0.04 of its potential returns per unit of risk. NKT AS is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 32,393 in NKT AS on August 25, 2024 and sell it today you would earn a total of 23,207 from holding NKT AS or generate 71.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
OMX Copenhagen All vs. NKT AS
Performance |
| Timeline |
OMX Copenhagen and NKT AS Volatility Contrast
Predicted Return Density |
| Returns |
OMX Copenhagen All
Pair trading matchups for OMX Copenhagen
NKT AS
Pair trading matchups for NKT AS
Pair Trading with OMX Copenhagen and NKT AS
The main advantage of trading using opposite OMX Copenhagen and NKT AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OMX Copenhagen position performs unexpectedly, NKT AS 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 NKT AS will offset losses from the drop in NKT AS's long position.| OMX Copenhagen vs. Laan Spar Bank | OMX Copenhagen vs. Strategic Investments AS | OMX Copenhagen vs. PARKEN Sport Entertainment | OMX Copenhagen vs. Vestjysk Bank AS |
| NKT AS vs. FLSmidth Co | NKT AS vs. GN Store Nord | NKT AS vs. DSV Panalpina AS | NKT AS vs. ROCKWOOL International AS |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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