Correlation Between NORDIC HALIBUT and Indutrade
Can any of the company-specific risk be diversified away by investing in both NORDIC HALIBUT and Indutrade 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 Indutrade 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 Indutrade AB, you can compare the effects of market volatilities on NORDIC HALIBUT and Indutrade 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 Indutrade. Check out your portfolio center. Please also check ongoing floating volatility patterns of NORDIC HALIBUT and Indutrade.
Diversification Opportunities for NORDIC HALIBUT and Indutrade
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NORDIC and Indutrade is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding NORDIC HALIBUT AS and Indutrade AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indutrade AB 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 Indutrade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indutrade AB has no effect on the direction of NORDIC HALIBUT i.e., NORDIC HALIBUT and Indutrade go up and down completely randomly.
Pair Corralation between NORDIC HALIBUT and Indutrade
Assuming the 90 days horizon NORDIC HALIBUT AS is expected to under-perform the Indutrade. In addition to that, NORDIC HALIBUT is 1.25 times more volatile than Indutrade AB. It trades about -0.01 of its total potential returns per unit of risk. Indutrade AB is currently generating about 0.04 per unit of volatility. If you would invest 2,061 in Indutrade AB on September 12, 2024 and sell it today you would earn a total of 365.00 from holding Indutrade AB or generate 17.71% 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. Indutrade AB
Performance |
| Timeline |
| NORDIC HALIBUT AS |
| Indutrade AB |
NORDIC HALIBUT and Indutrade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NORDIC HALIBUT and Indutrade
The main advantage of trading using opposite NORDIC HALIBUT and Indutrade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NORDIC HALIBUT position performs unexpectedly, Indutrade 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 Indutrade will offset losses from the drop in Indutrade'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 |
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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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