Correlation Between NEW PACIFIC and NORDIC HALIBUT
Can any of the company-specific risk be diversified away by investing in both NEW PACIFIC and NORDIC HALIBUT 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 NEW PACIFIC and NORDIC HALIBUT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NEW PACIFIC METALS and NORDIC HALIBUT AS, you can compare the effects of market volatilities on NEW PACIFIC and NORDIC HALIBUT 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 NEW PACIFIC with a short position of NORDIC HALIBUT. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEW PACIFIC and NORDIC HALIBUT.
Diversification Opportunities for NEW PACIFIC and NORDIC HALIBUT
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between NEW and NORDIC is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding NEW PACIFIC METALS and NORDIC HALIBUT AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NORDIC HALIBUT AS and NEW PACIFIC 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 NEW PACIFIC METALS are associated (or correlated) with NORDIC HALIBUT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NORDIC HALIBUT AS has no effect on the direction of NEW PACIFIC i.e., NEW PACIFIC and NORDIC HALIBUT go up and down completely randomly.
Pair Corralation between NEW PACIFIC and NORDIC HALIBUT
Assuming the 90 days trading horizon NEW PACIFIC METALS is expected to generate 0.89 times more return on investment than NORDIC HALIBUT. However, NEW PACIFIC METALS is 1.12 times less risky than NORDIC HALIBUT. It trades about 0.11 of its potential returns per unit of risk. NORDIC HALIBUT AS is currently generating about -0.23 per unit of risk. If you would invest 133.00 in NEW PACIFIC METALS on September 14, 2024 and sell it today you would earn a total of 8.00 from holding NEW PACIFIC METALS or generate 6.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NEW PACIFIC METALS vs. NORDIC HALIBUT AS
Performance |
| Timeline |
| NEW PACIFIC METALS |
| NORDIC HALIBUT AS |
NEW PACIFIC and NORDIC HALIBUT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEW PACIFIC and NORDIC HALIBUT
The main advantage of trading using opposite NEW PACIFIC and NORDIC HALIBUT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEW PACIFIC position performs unexpectedly, NORDIC HALIBUT 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 NORDIC HALIBUT will offset losses from the drop in NORDIC HALIBUT's long position.| NEW PACIFIC vs. Superior Plus Corp | NEW PACIFIC vs. SIVERS SEMICONDUCTORS AB | NEW PACIFIC vs. Norsk Hydro ASA | NEW PACIFIC vs. Reliance Steel Aluminum |
| NORDIC HALIBUT vs. Verizon Communications | NORDIC HALIBUT vs. Consolidated Communications Holdings | NORDIC HALIBUT vs. ARDAGH METAL PACDL 0001 | NORDIC HALIBUT vs. Cogent Communications Holdings |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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