Correlation Between NORDIC HALIBUT and Metro AG
Can any of the company-specific risk be diversified away by investing in both NORDIC HALIBUT and Metro AG 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 Metro AG 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 Metro AG, you can compare the effects of market volatilities on NORDIC HALIBUT and Metro AG 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 Metro AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of NORDIC HALIBUT and Metro AG.
Diversification Opportunities for NORDIC HALIBUT and Metro AG
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NORDIC and Metro is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding NORDIC HALIBUT AS and Metro AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metro AG 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 Metro AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metro AG has no effect on the direction of NORDIC HALIBUT i.e., NORDIC HALIBUT and Metro AG go up and down completely randomly.
Pair Corralation between NORDIC HALIBUT and Metro AG
Assuming the 90 days horizon NORDIC HALIBUT AS is expected to under-perform the Metro AG. But the stock apears to be less risky and, when comparing its historical volatility, NORDIC HALIBUT AS is 1.22 times less risky than Metro AG. The stock trades about -0.01 of its potential returns per unit of risk. The Metro AG is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 625.00 in Metro AG on September 19, 2024 and sell it today you would lose (129.00) from holding Metro AG or give up 20.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NORDIC HALIBUT AS vs. Metro AG
Performance |
| Timeline |
| NORDIC HALIBUT AS |
| Metro AG |
NORDIC HALIBUT and Metro AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NORDIC HALIBUT and Metro AG
The main advantage of trading using opposite NORDIC HALIBUT and Metro AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NORDIC HALIBUT position performs unexpectedly, Metro AG 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 Metro AG will offset losses from the drop in Metro AG's long position.| NORDIC HALIBUT vs. Apple Inc | NORDIC HALIBUT vs. Apple Inc | NORDIC HALIBUT vs. Apple Inc | NORDIC HALIBUT vs. Apple Inc |
| Metro AG vs. TYSON FOODS A | Metro AG vs. JJ SNACK FOODS | Metro AG vs. National Beverage Corp | Metro AG vs. Entravision Communications |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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