Correlation Between POSBO UNSPADRS20YC1 and NORDIC HALIBUT
Can any of the company-specific risk be diversified away by investing in both POSBO UNSPADRS20YC1 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 POSBO UNSPADRS20YC1 and NORDIC HALIBUT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POSBO UNSPADRS20YC1 and NORDIC HALIBUT AS, you can compare the effects of market volatilities on POSBO UNSPADRS20YC1 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 POSBO UNSPADRS20YC1 with a short position of NORDIC HALIBUT. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSBO UNSPADRS20YC1 and NORDIC HALIBUT.
Diversification Opportunities for POSBO UNSPADRS20YC1 and NORDIC HALIBUT
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between POSBO and NORDIC is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding POSBO UNSPADRS20YC1 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 POSBO UNSPADRS20YC1 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 POSBO UNSPADRS20YC1 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 POSBO UNSPADRS20YC1 i.e., POSBO UNSPADRS20YC1 and NORDIC HALIBUT go up and down completely randomly.
Pair Corralation between POSBO UNSPADRS20YC1 and NORDIC HALIBUT
Assuming the 90 days trading horizon POSBO UNSPADRS20YC1 is expected to generate 0.41 times more return on investment than NORDIC HALIBUT. However, POSBO UNSPADRS20YC1 is 2.44 times less risky than NORDIC HALIBUT. It trades about 0.04 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 1,030 in POSBO UNSPADRS20YC1 on September 14, 2024 and sell it today you would earn a total of 10.00 from holding POSBO UNSPADRS20YC1 or generate 0.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
POSBO UNSPADRS20YC1 vs. NORDIC HALIBUT AS
Performance |
| Timeline |
| POSBO UNSPADRS20YC1 |
| NORDIC HALIBUT AS |
POSBO UNSPADRS20YC1 and NORDIC HALIBUT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POSBO UNSPADRS20YC1 and NORDIC HALIBUT
The main advantage of trading using opposite POSBO UNSPADRS20YC1 and NORDIC HALIBUT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSBO UNSPADRS20YC1 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.| POSBO UNSPADRS20YC1 vs. Postal Savings Bank | POSBO UNSPADRS20YC1 vs. UTD OV BK LOC ADR1 | POSBO UNSPADRS20YC1 vs. Superior Plus Corp | POSBO UNSPADRS20YC1 vs. SIVERS SEMICONDUCTORS AB |
| 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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