Correlation Between Solar AS and NKT AS
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By analyzing existing cross correlation between Solar AS and NKT AS, you can compare the effects of market volatilities on Solar AS 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 Solar AS with a short position of NKT AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solar AS and NKT AS.
Diversification Opportunities for Solar AS and NKT AS
Poor diversification
The 3 months correlation between Solar and NKT is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Solar AS and NKT AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NKT AS and Solar AS 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 Solar 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 Solar AS i.e., Solar AS and NKT AS go up and down completely randomly.
Pair Corralation between Solar AS and NKT AS
Assuming the 90 days trading horizon Solar AS is expected to generate 0.9 times more return on investment than NKT AS. However, Solar AS is 1.11 times less risky than NKT AS. It trades about -0.07 of its potential returns per unit of risk. NKT AS is currently generating about -0.3 per unit of risk. If you would invest 31,950 in Solar AS on September 1, 2024 and sell it today you would lose (1,200) from holding Solar AS or give up 3.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Solar AS vs. NKT AS
Performance |
| Timeline |
| Solar AS |
| NKT AS |
Solar AS and NKT AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solar AS and NKT AS
The main advantage of trading using opposite Solar AS and NKT AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solar AS 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.| Solar AS vs. Matas AS | Solar AS vs. NKT AS | Solar AS vs. ROCKWOOL International AS | Solar AS vs. Dampskibsselskabet Norden 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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