Correlation Between Superior Plus and NEL ASA
Can any of the company-specific risk be diversified away by investing in both Superior Plus and NEL 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 Superior Plus and NEL ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Superior Plus Corp and NEL ASA ADR30, you can compare the effects of market volatilities on Superior Plus and NEL 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 Superior Plus with a short position of NEL ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and NEL ASA.
Diversification Opportunities for Superior Plus and NEL ASA
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Superior and NEL is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and NEL ASA ADR30 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEL ASA ADR30 and Superior Plus 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 Superior Plus Corp are associated (or correlated) with NEL ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEL ASA ADR30 has no effect on the direction of Superior Plus i.e., Superior Plus and NEL ASA go up and down completely randomly.
Pair Corralation between Superior Plus and NEL ASA
Assuming the 90 days horizon Superior Plus Corp is expected to generate 0.36 times more return on investment than NEL ASA. However, Superior Plus Corp is 2.77 times less risky than NEL ASA. It trades about -0.02 of its potential returns per unit of risk. NEL ASA ADR30 is currently generating about -0.03 per unit of risk. If you would invest 565.00 in Superior Plus Corp on August 26, 2024 and sell it today you would lose (155.00) from holding Superior Plus Corp or give up 27.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Superior Plus Corp vs. NEL ASA ADR30
Performance |
| Timeline |
| Superior Plus Corp |
| NEL ASA ADR30 |
Superior Plus and NEL ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and NEL ASA
The main advantage of trading using opposite Superior Plus and NEL ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus position performs unexpectedly, NEL 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 NEL ASA will offset losses from the drop in NEL ASA's long position.| Superior Plus vs. LION ONE METALS | Superior Plus vs. Zijin Mining Group | Superior Plus vs. SBI Insurance Group | Superior Plus vs. HANOVER INSURANCE |
| NEL ASA vs. Superior Plus Corp | NEL ASA vs. NMI Holdings | NEL ASA vs. Origin Agritech | NEL ASA vs. SIVERS SEMICONDUCTORS AB |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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