Correlation Between DnB ASA and Idex ASA
Can any of the company-specific risk be diversified away by investing in both DnB ASA and Idex 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 DnB ASA and Idex ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DnB ASA and Idex ASA, you can compare the effects of market volatilities on DnB ASA and Idex 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 DnB ASA with a short position of Idex ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of DnB ASA and Idex ASA.
Diversification Opportunities for DnB ASA and Idex ASA
Average diversification
The 3 months correlation between DnB and Idex is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding DnB ASA and Idex ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Idex ASA and DnB 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 DnB ASA are associated (or correlated) with Idex ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Idex ASA has no effect on the direction of DnB ASA i.e., DnB ASA and Idex ASA go up and down completely randomly.
Pair Corralation between DnB ASA and Idex ASA
Assuming the 90 days trading horizon DnB ASA is expected to generate 2.19 times less return on investment than Idex ASA. But when comparing it to its historical volatility, DnB ASA is 5.58 times less risky than Idex ASA. It trades about 0.07 of its potential returns per unit of risk. Idex ASA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 400.00 in Idex ASA on April 21, 2025 and sell it today you would lose (41.00) from holding Idex ASA or give up 10.25% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
DnB ASA vs. Idex ASA
Performance |
Timeline |
DnB ASA |
Idex ASA |
DnB ASA and Idex ASA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with DnB ASA and Idex ASA
The main advantage of trading using opposite DnB ASA and Idex ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DnB ASA position performs unexpectedly, Idex 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 Idex ASA will offset losses from the drop in Idex ASA's long position.DnB ASA vs. Telenor ASA | DnB ASA vs. Storebrand ASA | DnB ASA vs. Orkla ASA | DnB ASA vs. Gjensidige Forsikring ASA |
Idex ASA vs. Storebrand ASA | Idex ASA vs. DnB ASA | Idex ASA vs. Telenor ASA | Idex ASA vs. Kongsberg Gruppen 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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