Correlation Between Veidekke ASA and Kongsberg Gruppen
Can any of the company-specific risk be diversified away by investing in both Veidekke ASA 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 Veidekke ASA and Kongsberg Gruppen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Veidekke ASA and Kongsberg Gruppen ASA, you can compare the effects of market volatilities on Veidekke ASA 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 Veidekke ASA with a short position of Kongsberg Gruppen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Veidekke ASA and Kongsberg Gruppen.
Diversification Opportunities for Veidekke ASA and Kongsberg Gruppen
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Veidekke and Kongsberg is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Veidekke ASA 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 Veidekke 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 Veidekke ASA 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 Veidekke ASA i.e., Veidekke ASA and Kongsberg Gruppen go up and down completely randomly.
Pair Corralation between Veidekke ASA and Kongsberg Gruppen
Assuming the 90 days trading horizon Veidekke ASA is expected to generate 0.4 times more return on investment than Kongsberg Gruppen. However, Veidekke ASA is 2.52 times less risky than Kongsberg Gruppen. It trades about 0.13 of its potential returns per unit of risk. Kongsberg Gruppen ASA is currently generating about -0.09 per unit of risk. If you would invest 12,260 in Veidekke ASA on July 3, 2024 and sell it today you would earn a total of 300.00 from holding Veidekke ASA or generate 2.45% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Veidekke ASA vs. Kongsberg Gruppen ASA
Performance |
Timeline |
Veidekke ASA |
Kongsberg Gruppen ASA |
Veidekke ASA and Kongsberg Gruppen Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Veidekke ASA and Kongsberg Gruppen
The main advantage of trading using opposite Veidekke ASA and Kongsberg Gruppen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Veidekke ASA 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.Veidekke ASA vs. AF Gruppen ASA | Veidekke ASA vs. Gjensidige Forsikring ASA | Veidekke ASA vs. Storebrand ASA | Veidekke ASA vs. Orkla ASA |
Kongsberg Gruppen vs. Eidesvik Offshore ASA | Kongsberg Gruppen vs. Kitron ASA | Kongsberg Gruppen vs. Havila Shipping ASA | Kongsberg Gruppen vs. Arendals Fossekompani 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |