Correlation Between Selvaag Bolig and Kitron ASA

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

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

Diversification Opportunities for Selvaag Bolig and Kitron ASA

-0.14

Correlation Coefficient

Selvaag Bolig  Kitron ASA

Good diversification

The 3 months correlation between Selvaag and Kitron is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Selvaag Bolig ASA and Kitron ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kitron ASA and Selvaag Bolig 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 Selvaag Bolig ASA are associated (or correlated) with Kitron ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kitron ASA has no effect on the direction of Selvaag Bolig i.e., Selvaag Bolig and Kitron ASA go up and down completely randomly.

Pair Corralation between Selvaag Bolig and Kitron ASA

Assuming the 90 days trading horizon Selvaag Bolig is expected to generate 24.86 times less return on investment than Kitron ASA. But when comparing it to its historical volatility, Selvaag Bolig ASA is 2.02 times less risky than Kitron ASA. It trades about 0.01 of its potential returns per unit of risk. Kitron ASA is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  3,382  in Kitron ASA on December 30, 2024 and sell it today you would earn a total of  1,042  from holding Kitron ASA or generate 30.81% return on investment over 90 days.

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

Selvaag Bolig ASA  vs.  Kitron ASA

Selvaag Bolig ASA

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Selvaag Bolig ASA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Selvaag Bolig is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Kitron ASA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kitron ASA are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Kitron ASA disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Selvaag Bolig and Kitron ASA

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

The idea behind Selvaag Bolig ASA and Kitron 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.

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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.