Correlation Between Armada Hflr and KLP AksjeNorge

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

By analyzing existing cross correlation between Armada Hflr Pr and KLP AksjeNorge Indeks, you can compare the effects of market volatilities on Armada Hflr and KLP AksjeNorge 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 Armada Hflr with a short position of KLP AksjeNorge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hflr and KLP AksjeNorge.

Diversification Opportunities for Armada Hflr and KLP AksjeNorge

-0.39

Correlation Coefficient

Armada Hflr  KLP AksjeNorge

Very good diversification

The 3 months correlation between Armada and KLP is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and KLP AksjeNorge Indeks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KLP AksjeNorge Indeks and Armada Hflr 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 Armada Hflr Pr are associated (or correlated) with KLP AksjeNorge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KLP AksjeNorge Indeks has no effect on the direction of Armada Hflr i.e., Armada Hflr and KLP AksjeNorge go up and down completely randomly.

Pair Corralation between Armada Hflr and KLP AksjeNorge

Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the KLP AksjeNorge. In addition to that, Armada Hflr is 2.39 times more volatile than KLP AksjeNorge Indeks. It trades about -0.12 of its total potential returns per unit of risk. KLP AksjeNorge Indeks is currently generating about 0.04 per unit of volatility. If you would invest  373,425  in KLP AksjeNorge Indeks on September 20, 2024 and sell it today you would earn a total of  5,748  from holding KLP AksjeNorge Indeks or generate 1.54% return on investment over 90 days.

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

Armada Hflr Pr  vs.  KLP AksjeNorge Indeks

Armada Hflr Pr

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Armada Hflr Pr has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

KLP AksjeNorge Indeks

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in KLP AksjeNorge Indeks are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. Despite fairly strong technical indicators, KLP AksjeNorge is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Armada Hflr and KLP AksjeNorge

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

The idea behind Armada Hflr Pr and KLP AksjeNorge Indeks 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.