Correlation Between NORDIC HALIBUT and Leggett Platt
Can any of the company-specific risk be diversified away by investing in both NORDIC HALIBUT and Leggett Platt 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 Leggett Platt 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 Leggett Platt Incorporated, you can compare the effects of market volatilities on NORDIC HALIBUT and Leggett Platt 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 Leggett Platt. Check out your portfolio center. Please also check ongoing floating volatility patterns of NORDIC HALIBUT and Leggett Platt.
Diversification Opportunities for NORDIC HALIBUT and Leggett Platt
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NORDIC and Leggett is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding NORDIC HALIBUT AS and Leggett Platt Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leggett Platt 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 Leggett Platt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leggett Platt has no effect on the direction of NORDIC HALIBUT i.e., NORDIC HALIBUT and Leggett Platt go up and down completely randomly.
Pair Corralation between NORDIC HALIBUT and Leggett Platt
Assuming the 90 days horizon NORDIC HALIBUT AS is expected to generate 0.74 times more return on investment than Leggett Platt. However, NORDIC HALIBUT AS is 1.36 times less risky than Leggett Platt. It trades about -0.01 of its potential returns per unit of risk. Leggett Platt Incorporated is currently generating about -0.05 per unit of risk. If you would invest 183.00 in NORDIC HALIBUT AS on September 15, 2024 and sell it today you would lose (26.00) from holding NORDIC HALIBUT AS or give up 14.21% 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. Leggett Platt Incorporated
Performance |
| Timeline |
| NORDIC HALIBUT AS |
| Leggett Platt |
NORDIC HALIBUT and Leggett Platt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NORDIC HALIBUT and Leggett Platt
The main advantage of trading using opposite NORDIC HALIBUT and Leggett Platt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NORDIC HALIBUT position performs unexpectedly, Leggett Platt 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 Leggett Platt will offset losses from the drop in Leggett Platt's long position.| NORDIC HALIBUT vs. Apple Inc | NORDIC HALIBUT vs. Apple Inc | NORDIC HALIBUT vs. Apple Inc | NORDIC HALIBUT vs. Apple Inc |
| Leggett Platt vs. Superior Plus Corp | Leggett Platt vs. SIVERS SEMICONDUCTORS AB | Leggett Platt vs. NorAm Drilling AS | Leggett Platt vs. Norsk Hydro ASA |
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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