Correlation Between Kmc Properties and Eqva ASA

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

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

Diversification Opportunities for Kmc Properties and Eqva ASA

-0.45

Correlation Coefficient

Kmc Properties  Eqva ASA

Very good diversification

The 3 months correlation between Kmc and Eqva is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Kmc Properties ASA and Eqva ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eqva ASA and Kmc Properties 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 Kmc Properties ASA are associated (or correlated) with Eqva ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eqva ASA has no effect on the direction of Kmc Properties i.e., Kmc Properties and Eqva ASA go up and down completely randomly.

Pair Corralation between Kmc Properties and Eqva ASA

Assuming the 90 days trading horizon Kmc Properties ASA is expected to generate 17.51 times more return on investment than Eqva ASA. However, Kmc Properties is 17.51 times more volatile than Eqva ASA. It trades about 0.16 of its potential returns per unit of risk. Eqva ASA is currently generating about 0.17 per unit of risk. If you would invest  5.32  in Kmc Properties ASA on November 20, 2024 and sell it today you would earn a total of  0.30  from holding Kmc Properties ASA or generate 5.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Kmc Properties ASA  vs.  Eqva ASA

Kmc Properties ASA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kmc Properties ASA are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating essential indicators, Kmc Properties disclosed solid returns over the last few months and may actually be approaching a breakup point.

Eqva ASA

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Eqva ASA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent essential indicators, Eqva ASA is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Kmc Properties and Eqva ASA

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

The idea behind Kmc Properties ASA and Eqva 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.