Correlation Between Polight ASA and Napatech
Can any of the company-specific risk be diversified away by investing in both Polight ASA and Napatech 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 Polight ASA and Napatech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Polight ASA and Napatech AS, you can compare the effects of market volatilities on Polight ASA and Napatech 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 Polight ASA with a short position of Napatech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polight ASA and Napatech.
Diversification Opportunities for Polight ASA and Napatech
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Polight and Napatech is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Polight ASA and Napatech AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Napatech AS and Polight ASA 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 Polight ASA are associated (or correlated) with Napatech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Napatech AS has no effect on the direction of Polight ASA i.e., Polight ASA and Napatech go up and down completely randomly.
Pair Corralation between Polight ASA and Napatech
Assuming the 90 days trading horizon Polight ASA is expected to generate 1.57 times more return on investment than Napatech. However, Polight ASA is 1.57 times more volatile than Napatech AS. It trades about 0.04 of its potential returns per unit of risk. Napatech AS is currently generating about -0.06 per unit of risk. If you would invest 322.00 in Polight ASA on November 3, 2024 and sell it today you would earn a total of 25.00 from holding Polight ASA or generate 7.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polight ASA vs. Napatech AS
Performance |
| Timeline |
| Polight ASA |
| Napatech AS |
Polight ASA and Napatech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polight ASA and Napatech
The main advantage of trading using opposite Polight ASA and Napatech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polight ASA position performs unexpectedly, Napatech 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 Napatech will offset losses from the drop in Napatech's long position.| Polight ASA vs. Elliptic Laboratories AS | Polight ASA vs. Kongsberg Automotive Holding | Polight ASA vs. REC Silicon ASA |
| Napatech vs. Idex ASA | Napatech vs. Next Biometrics Group | Napatech vs. Polight ASA | Napatech vs. Kitron 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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