Correlation Between NORDIC HALIBUT and Bridgestone
Can any of the company-specific risk be diversified away by investing in both NORDIC HALIBUT and Bridgestone 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 Bridgestone 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 Bridgestone, you can compare the effects of market volatilities on NORDIC HALIBUT and Bridgestone 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 Bridgestone. Check out your portfolio center. Please also check ongoing floating volatility patterns of NORDIC HALIBUT and Bridgestone.
Diversification Opportunities for NORDIC HALIBUT and Bridgestone
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NORDIC and Bridgestone is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding NORDIC HALIBUT AS and Bridgestone in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridgestone 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 Bridgestone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bridgestone has no effect on the direction of NORDIC HALIBUT i.e., NORDIC HALIBUT and Bridgestone go up and down completely randomly.
Pair Corralation between NORDIC HALIBUT and Bridgestone
Assuming the 90 days horizon NORDIC HALIBUT AS is expected to under-perform the Bridgestone. In addition to that, NORDIC HALIBUT is 3.77 times more volatile than Bridgestone. It trades about -0.23 of its total potential returns per unit of risk. Bridgestone is currently generating about 0.0 per unit of volatility. If you would invest 1,600 in Bridgestone on September 14, 2024 and sell it today you would earn a total of 0.00 from holding Bridgestone or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NORDIC HALIBUT AS vs. Bridgestone
Performance |
| Timeline |
| NORDIC HALIBUT AS |
| Bridgestone |
NORDIC HALIBUT and Bridgestone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NORDIC HALIBUT and Bridgestone
The main advantage of trading using opposite NORDIC HALIBUT and Bridgestone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NORDIC HALIBUT position performs unexpectedly, Bridgestone 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 Bridgestone will offset losses from the drop in Bridgestone's long position.| NORDIC HALIBUT vs. Verizon Communications | NORDIC HALIBUT vs. Consolidated Communications Holdings | NORDIC HALIBUT vs. ARDAGH METAL PACDL 0001 | NORDIC HALIBUT vs. Cogent Communications Holdings |
| Bridgestone vs. Highlight Communications AG | Bridgestone vs. Tower One Wireless | Bridgestone vs. NEWELL RUBBERMAID | Bridgestone vs. Consolidated 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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