Correlation Between KLP AksjeGlobal and Nordnet Teknologi

Can any of the company-specific risk be diversified away by investing in both KLP AksjeGlobal and Nordnet Teknologi 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 KLP AksjeGlobal and Nordnet Teknologi into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between KLP AksjeGlobal Flerfaktor and Nordnet Teknologi Indeks, you can compare the effects of market volatilities on KLP AksjeGlobal and Nordnet Teknologi 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 KLP AksjeGlobal with a short position of Nordnet Teknologi. Check out your portfolio center. Please also check ongoing floating volatility patterns of KLP AksjeGlobal and Nordnet Teknologi.

Diversification Opportunities for KLP AksjeGlobal and Nordnet Teknologi

0.69

Correlation Coefficient

KLP AksjeGlobal  Nordnet Teknologi

Poor diversification

The 3 months correlation between KLP and Nordnet is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding KLP AksjeGlobal Flerfaktor and Nordnet Teknologi Indeks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordnet Teknologi Indeks and KLP AksjeGlobal 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 KLP AksjeGlobal Flerfaktor are associated (or correlated) with Nordnet Teknologi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordnet Teknologi Indeks has no effect on the direction of KLP AksjeGlobal i.e., KLP AksjeGlobal and Nordnet Teknologi go up and down completely randomly.

Pair Corralation between KLP AksjeGlobal and Nordnet Teknologi

Assuming the 90 days trading horizon KLP AksjeGlobal Flerfaktor is expected to under-perform the Nordnet Teknologi. But the fund apears to be less risky and, when comparing its historical volatility, KLP AksjeGlobal Flerfaktor is 2.1 times less risky than Nordnet Teknologi. The fund trades about -0.17 of its potential returns per unit of risk. The Nordnet Teknologi Indeks is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  23,241  in Nordnet Teknologi Indeks on October 10, 2024 and sell it today you would earn a total of  426.00  from holding Nordnet Teknologi Indeks or generate 1.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

KLP AksjeGlobal Flerfaktor  vs.  Nordnet Teknologi Indeks

KLP AksjeGlobal Fler

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in KLP AksjeGlobal Flerfaktor are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong basic indicators, KLP AksjeGlobal is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Nordnet Teknologi Indeks

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nordnet Teknologi Indeks are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of very weak primary indicators, Nordnet Teknologi may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with KLP AksjeGlobal and Nordnet Teknologi

The main advantage of trading using opposite KLP AksjeGlobal and Nordnet Teknologi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KLP AksjeGlobal position performs unexpectedly, Nordnet Teknologi 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 Nordnet Teknologi will offset losses from the drop in Nordnet Teknologi's long position.

The idea behind KLP AksjeGlobal Flerfaktor and Nordnet Teknologi Indeks pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.