Correlation Between NORDIC HALIBUT and Office Properties
Can any of the company-specific risk be diversified away by investing in both NORDIC HALIBUT and Office Properties 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 Office Properties 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 Office Properties Income, you can compare the effects of market volatilities on NORDIC HALIBUT and Office Properties 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 Office Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of NORDIC HALIBUT and Office Properties.
Diversification Opportunities for NORDIC HALIBUT and Office Properties
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NORDIC and Office is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding NORDIC HALIBUT AS and Office Properties Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Office Properties Income 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 Office Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Office Properties Income has no effect on the direction of NORDIC HALIBUT i.e., NORDIC HALIBUT and Office Properties go up and down completely randomly.
Pair Corralation between NORDIC HALIBUT and Office Properties
Assuming the 90 days horizon NORDIC HALIBUT AS is expected to under-perform the Office Properties. But the stock apears to be less risky and, when comparing its historical volatility, NORDIC HALIBUT AS is 3.43 times less risky than Office Properties. The stock trades about -0.25 of its potential returns per unit of risk. The Office Properties Income is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 104.00 in Office Properties Income on September 12, 2024 and sell it today you would earn a total of 26.00 from holding Office Properties Income or generate 25.0% 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. Office Properties Income
Performance |
| Timeline |
| NORDIC HALIBUT AS |
| Office Properties Income |
NORDIC HALIBUT and Office Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NORDIC HALIBUT and Office Properties
The main advantage of trading using opposite NORDIC HALIBUT and Office Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NORDIC HALIBUT position performs unexpectedly, Office Properties 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 Office Properties will offset losses from the drop in Office Properties' long position.| NORDIC HALIBUT vs. BJs Wholesale Club | NORDIC HALIBUT vs. Ross Stores | NORDIC HALIBUT vs. PICKN PAY STORES | NORDIC HALIBUT vs. Solstad Offshore ASA |
| Office Properties vs. CITY OFFICE REIT | Office Properties vs. CREMECOMTRSBI DL 001 | Office Properties vs. Superior Plus Corp | Office Properties 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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