Correlation Between Photocure and Kitron ASA
Can any of the company-specific risk be diversified away by investing in both Photocure and Kitron 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 Photocure and Kitron ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Photocure and Kitron ASA, you can compare the effects of market volatilities on Photocure and Kitron 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 Photocure with a short position of Kitron ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Photocure and Kitron ASA.
Diversification Opportunities for Photocure and Kitron ASA
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Photocure and Kitron is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Photocure and Kitron ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kitron ASA and Photocure 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 Photocure are associated (or correlated) with Kitron ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kitron ASA has no effect on the direction of Photocure i.e., Photocure and Kitron ASA go up and down completely randomly.
Pair Corralation between Photocure and Kitron ASA
Assuming the 90 days trading horizon Photocure is expected to generate 1.49 times more return on investment than Kitron ASA. However, Photocure is 1.49 times more volatile than Kitron ASA. It trades about 0.01 of its potential returns per unit of risk. Kitron ASA is currently generating about -0.02 per unit of risk. If you would invest 5,070 in Photocure on August 31, 2024 and sell it today you would lose (140.00) from holding Photocure or give up 2.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Photocure vs. Kitron ASA
Performance |
| Timeline |
| Photocure |
| Kitron ASA |
Photocure and Kitron ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Photocure and Kitron ASA
The main advantage of trading using opposite Photocure and Kitron ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Photocure position performs unexpectedly, Kitron 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 Kitron ASA will offset losses from the drop in Kitron ASA's long position.| Photocure vs. Sunndal Sparebank | Photocure vs. Nordic Mining ASA | Photocure vs. Skue Sparebank | Photocure vs. Lea Bank ASA |
| Kitron ASA vs. Europris ASA | Kitron ASA vs. Kongsberg Gruppen ASA | Kitron ASA vs. Nordic Semiconductor ASA | Kitron ASA vs. Storebrand 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |