Correlation Between Napatech and Frontline
Can any of the company-specific risk be diversified away by investing in both Napatech and Frontline 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 Napatech and Frontline into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Napatech AS and Frontline, you can compare the effects of market volatilities on Napatech and Frontline 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 Napatech with a short position of Frontline. Check out your portfolio center. Please also check ongoing floating volatility patterns of Napatech and Frontline.
Diversification Opportunities for Napatech and Frontline
Weak diversification
The 3 months correlation between Napatech and Frontline is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Napatech AS and Frontline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frontline and Napatech 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 Napatech AS are associated (or correlated) with Frontline. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frontline has no effect on the direction of Napatech i.e., Napatech and Frontline go up and down completely randomly.
Pair Corralation between Napatech and Frontline
Assuming the 90 days trading horizon Napatech AS is expected to generate 1.71 times more return on investment than Frontline. However, Napatech is 1.71 times more volatile than Frontline. It trades about 0.11 of its potential returns per unit of risk. Frontline is currently generating about 0.13 per unit of risk. If you would invest 2,280 in Napatech AS on September 2, 2025 and sell it today you would earn a total of 640.00 from holding Napatech AS or generate 28.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Napatech AS vs. Frontline
Performance |
| Timeline |
| Napatech AS |
| Frontline |
Napatech and Frontline Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Napatech and Frontline
The main advantage of trading using opposite Napatech and Frontline positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Napatech position performs unexpectedly, Frontline 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 Frontline will offset losses from the drop in Frontline's long position.| Napatech vs. Thor Medical ASA | Napatech vs. Norwegian Air Shuttle | Napatech vs. SoftwareOne Holding | Napatech vs. Lokotech Group AS |
| Frontline vs. Napatech AS | Frontline vs. Lokotech Group AS | Frontline vs. Arcticzymes Technologies ASA | Frontline vs. SpareBank 1 stlandet |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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