Correlation Between ROCKWOOL International and NKT AS
Can any of the company-specific risk be diversified away by investing in both ROCKWOOL International and NKT AS 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 ROCKWOOL International and NKT AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ROCKWOOL International AS and NKT AS, you can compare the effects of market volatilities on ROCKWOOL International and NKT AS 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 ROCKWOOL International with a short position of NKT AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of ROCKWOOL International and NKT AS.
Diversification Opportunities for ROCKWOOL International and NKT AS
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between ROCKWOOL and NKT is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding ROCKWOOL International AS and NKT AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NKT AS and ROCKWOOL International 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 ROCKWOOL International AS are associated (or correlated) with NKT AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NKT AS has no effect on the direction of ROCKWOOL International i.e., ROCKWOOL International and NKT AS go up and down completely randomly.
Pair Corralation between ROCKWOOL International and NKT AS
Assuming the 90 days trading horizon ROCKWOOL International AS is expected to generate 0.74 times more return on investment than NKT AS. However, ROCKWOOL International AS is 1.34 times less risky than NKT AS. It trades about 0.01 of its potential returns per unit of risk. NKT AS is currently generating about -0.22 per unit of risk. If you would invest 298,000 in ROCKWOOL International AS on August 25, 2024 and sell it today you would earn a total of 200.00 from holding ROCKWOOL International AS or generate 0.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ROCKWOOL International AS vs. NKT AS
Performance |
| Timeline |
| ROCKWOOL International |
| NKT AS |
ROCKWOOL International and NKT AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ROCKWOOL International and NKT AS
The main advantage of trading using opposite ROCKWOOL International and NKT AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ROCKWOOL International position performs unexpectedly, NKT AS 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 NKT AS will offset losses from the drop in NKT AS's long position.| ROCKWOOL International vs. FLSmidth Co | ROCKWOOL International vs. GN Store Nord | ROCKWOOL International vs. Ambu AS | ROCKWOOL International vs. DSV Panalpina AS |
| NKT AS vs. FLSmidth Co | NKT AS vs. GN Store Nord | NKT AS vs. DSV Panalpina AS | NKT AS vs. ROCKWOOL International 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |