Correlation Between Strategic Investments and Konsolidator
Can any of the company-specific risk be diversified away by investing in both Strategic Investments 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 Strategic Investments and Konsolidator into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strategic Investments AS and Konsolidator AS, you can compare the effects of market volatilities on Strategic Investments 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 Strategic Investments with a short position of Konsolidator. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Investments and Konsolidator.
Diversification Opportunities for Strategic Investments and Konsolidator
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Strategic and Konsolidator is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Investments AS and Konsolidator AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Konsolidator AS and Strategic Investments 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 Strategic Investments 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 Strategic Investments i.e., Strategic Investments and Konsolidator go up and down completely randomly.
Pair Corralation between Strategic Investments and Konsolidator
Assuming the 90 days trading horizon Strategic Investments AS is expected to generate 2.26 times more return on investment than Konsolidator. However, Strategic Investments is 2.26 times more volatile than Konsolidator AS. It trades about 0.02 of its potential returns per unit of risk. Konsolidator AS is currently generating about 0.01 per unit of risk. If you would invest 105.00 in Strategic Investments AS on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Strategic Investments 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 |
Strategic Investments AS vs. Konsolidator AS
Performance |
| Timeline |
| Strategic Investments |
| Konsolidator AS |
Strategic Investments and Konsolidator Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strategic Investments and Konsolidator
The main advantage of trading using opposite Strategic Investments and Konsolidator positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Investments 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.| Strategic Investments vs. SKAKO AS | Strategic Investments vs. Rovsing AS | Strategic Investments vs. Bavarian Nordic | Strategic Investments vs. Gyldendal 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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