Correlation Between NORSKE SKOG and CeoTronics
Can any of the company-specific risk be diversified away by investing in both NORSKE SKOG and CeoTronics 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 NORSKE SKOG and CeoTronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NORSKE SKOG AS and CeoTronics AG, you can compare the effects of market volatilities on NORSKE SKOG and CeoTronics 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 NORSKE SKOG with a short position of CeoTronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of NORSKE SKOG and CeoTronics.
Diversification Opportunities for NORSKE SKOG and CeoTronics
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NORSKE and CeoTronics is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding NORSKE SKOG AS and CeoTronics AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CeoTronics AG and NORSKE SKOG 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 NORSKE SKOG AS are associated (or correlated) with CeoTronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CeoTronics AG has no effect on the direction of NORSKE SKOG i.e., NORSKE SKOG and CeoTronics go up and down completely randomly.
Pair Corralation between NORSKE SKOG and CeoTronics
Assuming the 90 days horizon NORSKE SKOG AS is expected to under-perform the CeoTronics. In addition to that, NORSKE SKOG is 2.85 times more volatile than CeoTronics AG. It trades about -0.26 of its total potential returns per unit of risk. CeoTronics AG is currently generating about 0.13 per unit of volatility. If you would invest 590.00 in CeoTronics AG on October 24, 2024 and sell it today you would earn a total of 15.00 from holding CeoTronics AG or generate 2.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NORSKE SKOG AS vs. CeoTronics AG
Performance |
| Timeline |
| NORSKE SKOG AS |
| CeoTronics AG |
NORSKE SKOG and CeoTronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NORSKE SKOG and CeoTronics
The main advantage of trading using opposite NORSKE SKOG and CeoTronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NORSKE SKOG position performs unexpectedly, CeoTronics 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 CeoTronics will offset losses from the drop in CeoTronics' long position.| NORSKE SKOG vs. UPM Kymmene Oyj | NORSKE SKOG vs. STORA ENSO OYJ | NORSKE SKOG vs. Stora Enso Oyj | NORSKE SKOG vs. Suzano SA |
| CeoTronics vs. GLG LIFE TECH | CeoTronics vs. Kingdee International Software | CeoTronics vs. Fast Retailing Co | CeoTronics vs. Agilent Technologies |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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