Correlation Between Kitron ASA and Wilh Wilhelmsen

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

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

Diversification Opportunities for Kitron ASA and Wilh Wilhelmsen

-0.66

Correlation Coefficient

Kitron ASA  Wilh Wilhelmsen

Excellent diversification

The 3 months correlation between Kitron and Wilh is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Kitron ASA and Wilh Wilhelmsen Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilh Wilhelmsen Holding and Kitron 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 Kitron ASA are associated (or correlated) with Wilh Wilhelmsen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilh Wilhelmsen Holding has no effect on the direction of Kitron ASA i.e., Kitron ASA and Wilh Wilhelmsen go up and down completely randomly.

Pair Corralation between Kitron ASA and Wilh Wilhelmsen

Assuming the 90 days trading horizon Kitron ASA is expected to generate 1.04 times more return on investment than Wilh Wilhelmsen. However, Kitron ASA is 1.04 times more volatile than Wilh Wilhelmsen Holding. It trades about 0.06 of its potential returns per unit of risk. Wilh Wilhelmsen Holding is currently generating about -0.1 per unit of risk. If you would invest  3,116  in Kitron ASA on September 19, 2024 and sell it today you would earn a total of  188.00  from holding Kitron ASA or generate 6.03% return on investment over 90 days.

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

Kitron ASA  vs.  Wilh Wilhelmsen Holding

Kitron ASA

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kitron ASA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Kitron ASA may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Wilh Wilhelmsen Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wilh Wilhelmsen Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Kitron ASA and Wilh Wilhelmsen

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

The idea behind Kitron ASA and Wilh Wilhelmsen Holding 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.