Correlation Between Odfjell B and Kitron ASA
Can any of the company-specific risk be diversified away by investing in both Odfjell B and Kitron 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 Odfjell B and Kitron ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Odfjell B and Kitron ASA, you can compare the effects of market volatilities on Odfjell B and Kitron 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 Odfjell B with a short position of Kitron ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Odfjell B and Kitron ASA.
Diversification Opportunities for Odfjell B and Kitron ASA
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Odfjell and Kitron is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Odfjell B and Kitron ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kitron ASA and Odfjell B 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 Odfjell B are associated (or correlated) with Kitron ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kitron ASA has no effect on the direction of Odfjell B i.e., Odfjell B and Kitron ASA go up and down completely randomly.
Pair Corralation between Odfjell B and Kitron ASA
Assuming the 90 days trading horizon Odfjell B is expected to generate 2.14 times less return on investment than Kitron ASA. In addition to that, Odfjell B is 1.57 times more volatile than Kitron ASA. It trades about 0.06 of its total potential returns per unit of risk. Kitron ASA is currently generating about 0.19 per unit of volatility. If you would invest 4,576 in Kitron ASA on March 21, 2025 and sell it today you would earn a total of 1,139 from holding Kitron ASA or generate 24.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.31% |
| Values | Daily Returns |
Odfjell B vs. Kitron ASA
Performance |
| Timeline |
| Odfjell B |
| Kitron ASA |
Odfjell B and Kitron ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Odfjell B and Kitron ASA
The main advantage of trading using opposite Odfjell B and Kitron ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Odfjell B position performs unexpectedly, Kitron 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 Kitron ASA will offset losses from the drop in Kitron ASA's long position.| Odfjell B vs. Clean Seas Seafood | Odfjell B vs. Sparebanken Ost | Odfjell B vs. Xplora Technologies As | Odfjell B vs. Morrow Bank ASA |
| Kitron ASA vs. Europris ASA | Kitron ASA vs. Kongsberg Gruppen ASA | Kitron ASA vs. Nordic Semiconductor ASA | Kitron ASA vs. Storebrand 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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