Correlation Between Kongsberg Gruppen and Nordic Technology
Can any of the company-specific risk be diversified away by investing in both Kongsberg Gruppen and Nordic Technology 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 Kongsberg Gruppen and Nordic Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kongsberg Gruppen ASA and Nordic Technology Group, you can compare the effects of market volatilities on Kongsberg Gruppen and Nordic Technology 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 Kongsberg Gruppen with a short position of Nordic Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kongsberg Gruppen and Nordic Technology.
Diversification Opportunities for Kongsberg Gruppen and Nordic Technology
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Kongsberg and Nordic is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Kongsberg Gruppen ASA and Nordic Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordic Technology and Kongsberg Gruppen 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 Kongsberg Gruppen ASA are associated (or correlated) with Nordic Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordic Technology has no effect on the direction of Kongsberg Gruppen i.e., Kongsberg Gruppen and Nordic Technology go up and down completely randomly.
Pair Corralation between Kongsberg Gruppen and Nordic Technology
Assuming the 90 days trading horizon Kongsberg Gruppen ASA is expected to generate 0.2 times more return on investment than Nordic Technology. However, Kongsberg Gruppen ASA is 4.89 times less risky than Nordic Technology. It trades about 0.1 of its potential returns per unit of risk. Nordic Technology Group is currently generating about 0.01 per unit of risk. If you would invest 135,000 in Kongsberg Gruppen ASA on December 4, 2024 and sell it today you would earn a total of 23,200 from holding Kongsberg Gruppen ASA or generate 17.19% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Kongsberg Gruppen ASA vs. Nordic Technology Group
Performance |
Timeline |
Kongsberg Gruppen ASA |
Nordic Technology |
Kongsberg Gruppen and Nordic Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kongsberg Gruppen and Nordic Technology
The main advantage of trading using opposite Kongsberg Gruppen and Nordic Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kongsberg Gruppen position performs unexpectedly, Nordic Technology 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 Nordic Technology will offset losses from the drop in Nordic Technology's long position.Kongsberg Gruppen vs. DnB ASA | Kongsberg Gruppen vs. Orkla ASA | Kongsberg Gruppen vs. Storebrand ASA | Kongsberg Gruppen vs. Yara International ASA |
Nordic Technology vs. Arcticzymes Technologies ASA | Nordic Technology vs. Skue Sparebank | Nordic Technology vs. BW Offshore | Nordic Technology vs. Bien Sparebank ASA |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |