Correlation Between NORDIC HALIBUT and American Lithium
Can any of the company-specific risk be diversified away by investing in both NORDIC HALIBUT and American Lithium 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 NORDIC HALIBUT and American Lithium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NORDIC HALIBUT AS and American Lithium Corp, you can compare the effects of market volatilities on NORDIC HALIBUT and American Lithium 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 NORDIC HALIBUT with a short position of American Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of NORDIC HALIBUT and American Lithium.
Diversification Opportunities for NORDIC HALIBUT and American Lithium
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between NORDIC and American is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding NORDIC HALIBUT AS and American Lithium Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Lithium Corp and NORDIC HALIBUT 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 NORDIC HALIBUT AS are associated (or correlated) with American Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Lithium Corp has no effect on the direction of NORDIC HALIBUT i.e., NORDIC HALIBUT and American Lithium go up and down completely randomly.
Pair Corralation between NORDIC HALIBUT and American Lithium
Assuming the 90 days horizon NORDIC HALIBUT AS is expected to generate 0.39 times more return on investment than American Lithium. However, NORDIC HALIBUT AS is 2.54 times less risky than American Lithium. It trades about -0.25 of its potential returns per unit of risk. American Lithium Corp is currently generating about -0.15 per unit of risk. If you would invest 220.00 in NORDIC HALIBUT AS on September 13, 2024 and sell it today you would lose (55.00) from holding NORDIC HALIBUT AS or give up 25.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NORDIC HALIBUT AS vs. American Lithium Corp
Performance |
| Timeline |
| NORDIC HALIBUT AS |
| American Lithium Corp |
NORDIC HALIBUT and American Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NORDIC HALIBUT and American Lithium
The main advantage of trading using opposite NORDIC HALIBUT and American Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NORDIC HALIBUT position performs unexpectedly, American Lithium 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 American Lithium will offset losses from the drop in American Lithium's long position.| NORDIC HALIBUT vs. HEALTHCARE REAL A | NORDIC HALIBUT vs. ANTA SPORTS PRODUCT | NORDIC HALIBUT vs. Big 5 Sporting | NORDIC HALIBUT vs. ATRYS HEALTH SA |
| American Lithium vs. Standard Lithium | American Lithium vs. BYD Company Limited | American Lithium vs. Rock Tech Lithium |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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