Correlation Between Odfjell Technology and Kraft Bank
Can any of the company-specific risk be diversified away by investing in both Odfjell Technology and Kraft Bank 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 Odfjell Technology and Kraft Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Odfjell Technology and Kraft Bank Asa, you can compare the effects of market volatilities on Odfjell Technology and Kraft Bank 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 Odfjell Technology with a short position of Kraft Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Odfjell Technology and Kraft Bank.
Diversification Opportunities for Odfjell Technology and Kraft Bank
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Odfjell and Kraft is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Odfjell Technology and Kraft Bank Asa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kraft Bank Asa and Odfjell Technology 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 Odfjell Technology are associated (or correlated) with Kraft Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kraft Bank Asa has no effect on the direction of Odfjell Technology i.e., Odfjell Technology and Kraft Bank go up and down completely randomly.
Pair Corralation between Odfjell Technology and Kraft Bank
Assuming the 90 days trading horizon Odfjell Technology is expected to under-perform the Kraft Bank. In addition to that, Odfjell Technology is 1.91 times more volatile than Kraft Bank Asa. It trades about -0.18 of its total potential returns per unit of risk. Kraft Bank Asa is currently generating about -0.22 per unit of volatility. If you would invest 860.00 in Kraft Bank Asa on November 3, 2024 and sell it today you would lose (30.00) from holding Kraft Bank Asa or give up 3.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Odfjell Technology vs. Kraft Bank Asa
Performance |
| Timeline |
| Odfjell Technology |
| Kraft Bank Asa |
Odfjell Technology and Kraft Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Odfjell Technology and Kraft Bank
The main advantage of trading using opposite Odfjell Technology and Kraft Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Odfjell Technology position performs unexpectedly, Kraft Bank 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 Kraft Bank will offset losses from the drop in Kraft Bank's long position.| Odfjell Technology vs. Melhus Sparebank | Odfjell Technology vs. Nordic Mining ASA | Odfjell Technology vs. Bien Sparebank ASA | Odfjell Technology vs. SD Standard Drilling |
| Kraft Bank vs. Shelf Drilling | Kraft Bank vs. Helgeland Sparebank | Kraft Bank vs. Nordic Mining ASA | Kraft Bank vs. Clean Seas Seafood |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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