Correlation Between Telenor ASA and Kongsberg Gruppen
Can any of the company-specific risk be diversified away by investing in both Telenor ASA and Kongsberg Gruppen 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 Telenor ASA and Kongsberg Gruppen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telenor ASA and Kongsberg Gruppen ASA, you can compare the effects of market volatilities on Telenor ASA and Kongsberg Gruppen 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 Telenor ASA with a short position of Kongsberg Gruppen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telenor ASA and Kongsberg Gruppen.
Diversification Opportunities for Telenor ASA and Kongsberg Gruppen
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Telenor and Kongsberg is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Telenor ASA and Kongsberg Gruppen ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kongsberg Gruppen ASA and Telenor ASA 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 Telenor ASA are associated (or correlated) with Kongsberg Gruppen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kongsberg Gruppen ASA has no effect on the direction of Telenor ASA i.e., Telenor ASA and Kongsberg Gruppen go up and down completely randomly.
Pair Corralation between Telenor ASA and Kongsberg Gruppen
Assuming the 90 days trading horizon Telenor ASA is expected to generate 1.19 times less return on investment than Kongsberg Gruppen. But when comparing it to its historical volatility, Telenor ASA is 1.71 times less risky than Kongsberg Gruppen. It trades about 0.29 of its potential returns per unit of risk. Kongsberg Gruppen ASA is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 125,100 in Kongsberg Gruppen ASA on November 4, 2024 and sell it today you would earn a total of 9,500 from holding Kongsberg Gruppen ASA or generate 7.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telenor ASA vs. Kongsberg Gruppen ASA
Performance |
| Timeline |
| Telenor ASA |
| Kongsberg Gruppen ASA |
Telenor ASA and Kongsberg Gruppen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telenor ASA and Kongsberg Gruppen
The main advantage of trading using opposite Telenor ASA and Kongsberg Gruppen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telenor ASA position performs unexpectedly, Kongsberg Gruppen 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 Kongsberg Gruppen will offset losses from the drop in Kongsberg Gruppen's long position.| Telenor ASA vs. Orkla ASA | Telenor ASA vs. DnB ASA | Telenor ASA vs. Yara International ASA | Telenor ASA vs. Storebrand ASA |
| Kongsberg Gruppen vs. DnB ASA | Kongsberg Gruppen vs. Orkla ASA | Kongsberg Gruppen vs. Storebrand ASA | Kongsberg Gruppen vs. Yara International ASA |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |