Correlation Between NORDIC HALIBUT and American International
Can any of the company-specific risk be diversified away by investing in both NORDIC HALIBUT and American International 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 International 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 International Group, you can compare the effects of market volatilities on NORDIC HALIBUT and American International 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 International. Check out your portfolio center. Please also check ongoing floating volatility patterns of NORDIC HALIBUT and American International.
Diversification Opportunities for NORDIC HALIBUT and American International
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NORDIC and American is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding NORDIC HALIBUT AS and American International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American International 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 International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American International has no effect on the direction of NORDIC HALIBUT i.e., NORDIC HALIBUT and American International go up and down completely randomly.
Pair Corralation between NORDIC HALIBUT and American International
Assuming the 90 days horizon NORDIC HALIBUT AS is expected to under-perform the American International. In addition to that, NORDIC HALIBUT is 3.41 times more volatile than American International Group. It trades about -0.32 of its total potential returns per unit of risk. American International Group is currently generating about -0.14 per unit of volatility. If you would invest 7,211 in American International Group on September 15, 2024 and sell it today you would lose (219.00) from holding American International Group or give up 3.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NORDIC HALIBUT AS vs. American International Group
Performance |
| Timeline |
| NORDIC HALIBUT AS |
| American International |
NORDIC HALIBUT and American International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NORDIC HALIBUT and American International
The main advantage of trading using opposite NORDIC HALIBUT and American International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NORDIC HALIBUT position performs unexpectedly, American International 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 International will offset losses from the drop in American International's long position.| NORDIC HALIBUT vs. Apple Inc | NORDIC HALIBUT vs. Apple Inc | NORDIC HALIBUT vs. Apple Inc | NORDIC HALIBUT vs. Apple Inc |
| American International vs. Superior Plus Corp | American International vs. SIVERS SEMICONDUCTORS AB | American International vs. CHINA HUARONG ENERHD 50 | American International vs. NORDIC HALIBUT AS |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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