Correlation Between Prime Office and Konsolidator
Can any of the company-specific risk be diversified away by investing in both Prime Office and Konsolidator 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 Prime Office and Konsolidator into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prime Office AS and Konsolidator AS, you can compare the effects of market volatilities on Prime Office and Konsolidator 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 Prime Office with a short position of Konsolidator. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prime Office and Konsolidator.
Diversification Opportunities for Prime Office and Konsolidator
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Prime and Konsolidator is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Prime Office AS and Konsolidator AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Konsolidator AS and Prime Office 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 Prime Office AS are associated (or correlated) with Konsolidator. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Konsolidator AS has no effect on the direction of Prime Office i.e., Prime Office and Konsolidator go up and down completely randomly.
Pair Corralation between Prime Office and Konsolidator
Assuming the 90 days trading horizon Prime Office AS is expected to under-perform the Konsolidator. In addition to that, Prime Office is 1.04 times more volatile than Konsolidator AS. It trades about -0.07 of its total potential returns per unit of risk. Konsolidator AS is currently generating about 0.01 per unit of volatility. If you would invest 380.00 in Konsolidator AS on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Konsolidator AS or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prime Office AS vs. Konsolidator AS
Performance |
| Timeline |
| Prime Office AS |
| Konsolidator AS |
Prime Office and Konsolidator Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prime Office and Konsolidator
The main advantage of trading using opposite Prime Office and Konsolidator positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prime Office position performs unexpectedly, Konsolidator 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 Konsolidator will offset losses from the drop in Konsolidator's long position.| Prime Office vs. Djurslands Bank | Prime Office vs. North Media AS | Prime Office vs. First Farms AS | Prime Office vs. Flgger group AS |
| Konsolidator vs. Strategic Investments AS | Konsolidator vs. Laan Spar Bank | Konsolidator vs. Cessatech AS | Konsolidator vs. Prime Office 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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