Correlation Between NORDIC HALIBUT and Tencent Holdings
Can any of the company-specific risk be diversified away by investing in both NORDIC HALIBUT and Tencent Holdings 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 Tencent Holdings 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 Tencent Holdings, you can compare the effects of market volatilities on NORDIC HALIBUT and Tencent Holdings 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 Tencent Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of NORDIC HALIBUT and Tencent Holdings.
Diversification Opportunities for NORDIC HALIBUT and Tencent Holdings
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between NORDIC and Tencent is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding NORDIC HALIBUT AS and Tencent Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tencent Holdings 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 Tencent Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tencent Holdings has no effect on the direction of NORDIC HALIBUT i.e., NORDIC HALIBUT and Tencent Holdings go up and down completely randomly.
Pair Corralation between NORDIC HALIBUT and Tencent Holdings
Assuming the 90 days horizon NORDIC HALIBUT AS is expected to under-perform the Tencent Holdings. In addition to that, NORDIC HALIBUT is 1.96 times more volatile than Tencent Holdings. It trades about -0.32 of its total potential returns per unit of risk. Tencent Holdings is currently generating about 0.08 per unit of volatility. If you would invest 4,901 in Tencent Holdings on September 15, 2024 and sell it today you would earn a total of 129.00 from holding Tencent Holdings or generate 2.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NORDIC HALIBUT AS vs. Tencent Holdings
Performance |
| Timeline |
| NORDIC HALIBUT AS |
| Tencent Holdings |
NORDIC HALIBUT and Tencent Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NORDIC HALIBUT and Tencent Holdings
The main advantage of trading using opposite NORDIC HALIBUT and Tencent Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NORDIC HALIBUT position performs unexpectedly, Tencent Holdings 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 Tencent Holdings will offset losses from the drop in Tencent Holdings' long position.| NORDIC HALIBUT vs. Apple Inc | NORDIC HALIBUT vs. Apple Inc | NORDIC HALIBUT vs. Apple Inc | NORDIC HALIBUT vs. Apple Inc |
| Tencent Holdings vs. BYD Company Limited | Tencent Holdings vs. Alibaba Group Holdings | Tencent Holdings vs. Xiaomi | Tencent Holdings vs. Baidu Inc |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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