Correlation Between Sea1 Offshore and Kraft Bank
Can any of the company-specific risk be diversified away by investing in both Sea1 Offshore and Kraft Bank 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 Sea1 Offshore and Kraft Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sea1 Offshore and Kraft Bank Asa, you can compare the effects of market volatilities on Sea1 Offshore and Kraft Bank 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 Sea1 Offshore with a short position of Kraft Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sea1 Offshore and Kraft Bank.
Diversification Opportunities for Sea1 Offshore and Kraft Bank
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sea1 and Kraft is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Sea1 Offshore and Kraft Bank Asa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kraft Bank Asa and Sea1 Offshore 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 Sea1 Offshore are associated (or correlated) with Kraft Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kraft Bank Asa has no effect on the direction of Sea1 Offshore i.e., Sea1 Offshore and Kraft Bank go up and down completely randomly.
Pair Corralation between Sea1 Offshore and Kraft Bank
Assuming the 90 days trading horizon Sea1 Offshore is expected to generate 7.11 times more return on investment than Kraft Bank. However, Sea1 Offshore is 7.11 times more volatile than Kraft Bank Asa. It trades about 0.17 of its potential returns per unit of risk. Kraft Bank Asa is currently generating about -0.27 per unit of risk. If you would invest 1,939 in Sea1 Offshore on November 5, 2024 and sell it today you would earn a total of 331.00 from holding Sea1 Offshore or generate 17.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sea1 Offshore vs. Kraft Bank Asa
Performance |
| Timeline |
| Sea1 Offshore |
| Kraft Bank Asa |
Sea1 Offshore and Kraft Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sea1 Offshore and Kraft Bank
The main advantage of trading using opposite Sea1 Offshore and Kraft Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sea1 Offshore position performs unexpectedly, Kraft Bank 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 Kraft Bank will offset losses from the drop in Kraft Bank's long position.| Sea1 Offshore vs. Equinor ASA | Sea1 Offshore vs. DnB ASA | Sea1 Offshore vs. Aker BP ASA | Sea1 Offshore vs. Telenor ASA |
| Kraft Bank vs. Skue Sparebank | Kraft Bank vs. Lery Seafood Group | Kraft Bank vs. Polaris Media | Kraft Bank vs. Cloudberry Clean Energy |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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