Correlation Between Kitron ASA and Vow ASA
Can any of the company-specific risk be diversified away by investing in both Kitron ASA and Vow 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 Kitron ASA and Vow ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kitron ASA and Vow ASA, you can compare the effects of market volatilities on Kitron ASA and Vow 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 Kitron ASA with a short position of Vow ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kitron ASA and Vow ASA.
Diversification Opportunities for Kitron ASA and Vow ASA
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kitron and Vow is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Kitron ASA and Vow ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vow ASA 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 Vow ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vow ASA has no effect on the direction of Kitron ASA i.e., Kitron ASA and Vow ASA go up and down completely randomly.
Pair Corralation between Kitron ASA and Vow ASA
Assuming the 90 days trading horizon Kitron ASA is expected to generate 2.0 times less return on investment than Vow ASA. But when comparing it to its historical volatility, Kitron ASA is 3.23 times less risky than Vow ASA. It trades about 0.25 of its potential returns per unit of risk. Vow ASA is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 151.00 in Vow ASA on March 30, 2025 and sell it today you would earn a total of 100.00 from holding Vow ASA or generate 66.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kitron ASA vs. Vow ASA
Performance |
| Timeline |
| Kitron ASA |
| Vow ASA |
Kitron ASA and Vow ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kitron ASA and Vow ASA
The main advantage of trading using opposite Kitron ASA and Vow ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kitron ASA position performs unexpectedly, Vow 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 Vow ASA will offset losses from the drop in Vow ASA's long position.| Kitron ASA vs. Europris ASA | Kitron ASA vs. Kongsberg Gruppen ASA | Kitron ASA vs. Nordic Semiconductor ASA | Kitron ASA vs. Storebrand ASA |
| Vow ASA vs. Hexagon Composites ASA | Vow ASA vs. Vow Green Metals | Vow ASA vs. REC Silicon ASA | Vow ASA vs. Aker Carbon Capture |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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