Correlation Between Nordnet One and KLP AksjeGlobal

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

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

Diversification Opportunities for Nordnet One and KLP AksjeGlobal

0.64

Correlation Coefficient

Nordnet One  KLP AksjeGlobal

Poor diversification

The 3 months correlation between Nordnet and KLP is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Nordnet One Balansert and KLP AksjeGlobal Flerfaktor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KLP AksjeGlobal Fler and Nordnet One 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 Nordnet One Balansert are associated (or correlated) with KLP AksjeGlobal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KLP AksjeGlobal Fler has no effect on the direction of Nordnet One i.e., Nordnet One and KLP AksjeGlobal go up and down completely randomly.

Pair Corralation between Nordnet One and KLP AksjeGlobal

Assuming the 90 days trading horizon Nordnet One Balansert is expected to under-perform the KLP AksjeGlobal. But the fund apears to be less risky and, when comparing its historical volatility, Nordnet One Balansert is 1.29 times less risky than KLP AksjeGlobal. The fund trades about -0.12 of its potential returns per unit of risk. The KLP AksjeGlobal Flerfaktor is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  236,404  in KLP AksjeGlobal Flerfaktor on December 26, 2024 and sell it today you would earn a total of  1,067  from holding KLP AksjeGlobal Flerfaktor or generate 0.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

Nordnet One Balansert  vs.  KLP AksjeGlobal Flerfaktor

Nordnet One Balansert

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nordnet One Balansert has generated negative risk-adjusted returns adding no value to fund investors. Even with relatively invariable basic indicators, Nordnet One is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

KLP AksjeGlobal Fler

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in KLP AksjeGlobal Flerfaktor are ranked lower than 1 (%) 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 latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Nordnet One and KLP AksjeGlobal

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

The idea behind Nordnet One Balansert and KLP AksjeGlobal Flerfaktor 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.