Correlation Between Kitron ASA and Byggma

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

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

Diversification Opportunities for Kitron ASA and Byggma

0.0

Correlation Coefficient

Kitron ASA  Byggma

Pay attention - limited upside

The 3 months correlation between Kitron and Byggma is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Kitron ASA and Byggma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Byggma and Kitron 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 Kitron ASA are associated (or correlated) with Byggma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Byggma has no effect on the direction of Kitron ASA i.e., Kitron ASA and Byggma go up and down completely randomly.

Pair Corralation between Kitron ASA and Byggma

If you would invest (100.00) in Byggma on September 3, 2024 and sell it today you would earn a total of  100.00  from holding Byggma or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Kitron ASA  vs.  Byggma

Kitron ASA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kitron ASA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Kitron ASA is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Byggma

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Byggma has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Kitron ASA and Byggma

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

The idea behind Kitron ASA and Byggma 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.

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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.