Correlation Between Glucose Health and Kongsberg Gruppen

Can any of the company-specific risk be diversified away by investing in both Glucose Health 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 Glucose Health and Kongsberg Gruppen into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Glucose Health and Kongsberg Gruppen ASA, you can compare the effects of market volatilities on Glucose Health 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 Glucose Health with a short position of Kongsberg Gruppen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glucose Health and Kongsberg Gruppen.

Diversification Opportunities for Glucose Health and Kongsberg Gruppen

-0.4

Correlation Coefficient

Glucose Health  Kongsberg Gruppen

Very good diversification

The 3 months correlation between Glucose and Kongsberg is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Glucose Health 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 Glucose Health 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 Glucose Health 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 Glucose Health i.e., Glucose Health and Kongsberg Gruppen go up and down completely randomly.

Pair Corralation between Glucose Health and Kongsberg Gruppen

Given the investment horizon of 90 days Glucose Health is expected to under-perform the Kongsberg Gruppen. In addition to that, Glucose Health is 4.52 times more volatile than Kongsberg Gruppen ASA. It trades about -0.01 of its total potential returns per unit of risk. Kongsberg Gruppen ASA is currently generating about 0.03 per unit of volatility. If you would invest  10,435  in Kongsberg Gruppen ASA on October 25, 2024 and sell it today you would earn a total of  333.00  from holding Kongsberg Gruppen ASA or generate 3.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.16%
Values	Daily Returns

Glucose Health  vs.  Kongsberg Gruppen ASA

Glucose Health

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Glucose Health has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Glucose Health is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Kongsberg Gruppen ASA

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kongsberg Gruppen ASA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Kongsberg Gruppen is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Glucose Health and Kongsberg Gruppen

The main advantage of trading using opposite Glucose Health and Kongsberg Gruppen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glucose Health 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.

The idea behind Glucose Health and Kongsberg Gruppen ASA 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.