Correlation Between Ammo and Kongsberg Gruppen
Can any of the company-specific risk be diversified away by investing in both Ammo and Kongsberg Gruppen 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 Ammo and Kongsberg Gruppen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ammo Inc and Kongsberg Gruppen ASA, you can compare the effects of market volatilities on Ammo and Kongsberg Gruppen 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 Ammo with a short position of Kongsberg Gruppen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ammo and Kongsberg Gruppen.
Diversification Opportunities for Ammo and Kongsberg Gruppen
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ammo and Kongsberg is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Ammo Inc and Kongsberg Gruppen ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kongsberg Gruppen ASA and Ammo 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 Ammo Inc are associated (or correlated) with Kongsberg Gruppen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kongsberg Gruppen ASA has no effect on the direction of Ammo i.e., Ammo and Kongsberg Gruppen go up and down completely randomly.
Pair Corralation between Ammo and Kongsberg Gruppen
Given the investment horizon of 90 days Ammo Inc is expected to under-perform the Kongsberg Gruppen. In addition to that, Ammo is 1.35 times more volatile than Kongsberg Gruppen ASA. It trades about -0.07 of its total potential returns per unit of risk. Kongsberg Gruppen ASA is currently generating about 0.07 per unit of volatility. If you would invest 9,841 in Kongsberg Gruppen ASA on August 30, 2024 and sell it today you would earn a total of 759.00 from holding Kongsberg Gruppen ASA or generate 7.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.35% |
| Values | Daily Returns |
Ammo Inc vs. Kongsberg Gruppen ASA
Performance |
| Timeline |
| Ammo Inc |
| Kongsberg Gruppen ASA |
Ammo and Kongsberg Gruppen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ammo and Kongsberg Gruppen
The main advantage of trading using opposite Ammo and Kongsberg Gruppen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ammo position performs unexpectedly, Kongsberg Gruppen 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 Kongsberg Gruppen will offset losses from the drop in Kongsberg Gruppen's long position.| Ammo vs. Sturm Ruger | Ammo vs. Kratos Defense Security | Ammo vs. VSE Corporation | Ammo vs. Smith Wesson Brands |
| Kongsberg Gruppen vs. Sturm Ruger | Kongsberg Gruppen vs. Ammo Inc | Kongsberg Gruppen vs. Kratos Defense Security | Kongsberg Gruppen vs. VSE Corporation |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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