Correlation Between NORDIC HALIBUT and CHINA HUARONG
Can any of the company-specific risk be diversified away by investing in both NORDIC HALIBUT and CHINA HUARONG 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 CHINA HUARONG 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 CHINA HUARONG ENERHD 50, you can compare the effects of market volatilities on NORDIC HALIBUT and CHINA HUARONG 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 CHINA HUARONG. Check out your portfolio center. Please also check ongoing floating volatility patterns of NORDIC HALIBUT and CHINA HUARONG.
Diversification Opportunities for NORDIC HALIBUT and CHINA HUARONG
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between NORDIC and CHINA is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding NORDIC HALIBUT AS and CHINA HUARONG ENERHD 50 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA HUARONG ENERHD 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 CHINA HUARONG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA HUARONG ENERHD has no effect on the direction of NORDIC HALIBUT i.e., NORDIC HALIBUT and CHINA HUARONG go up and down completely randomly.
Pair Corralation between NORDIC HALIBUT and CHINA HUARONG
Assuming the 90 days horizon NORDIC HALIBUT is expected to generate 281.81 times less return on investment than CHINA HUARONG. But when comparing it to its historical volatility, NORDIC HALIBUT AS is 11.62 times less risky than CHINA HUARONG. It trades about 0.0 of its potential returns per unit of risk. CHINA HUARONG ENERHD 50 is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 0.35 in CHINA HUARONG ENERHD 50 on September 1, 2024 and sell it today you would lose (0.20) from holding CHINA HUARONG ENERHD 50 or give up 57.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.24% |
| Values | Daily Returns |
NORDIC HALIBUT AS vs. CHINA HUARONG ENERHD 50
Performance |
| Timeline |
| NORDIC HALIBUT AS |
| CHINA HUARONG ENERHD |
NORDIC HALIBUT and CHINA HUARONG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NORDIC HALIBUT and CHINA HUARONG
The main advantage of trading using opposite NORDIC HALIBUT and CHINA HUARONG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NORDIC HALIBUT position performs unexpectedly, CHINA HUARONG 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 CHINA HUARONG will offset losses from the drop in CHINA HUARONG's long position.| NORDIC HALIBUT vs. Apple Inc | NORDIC HALIBUT vs. Apple Inc | NORDIC HALIBUT vs. Apple Inc | NORDIC HALIBUT vs. Apple Inc |
| CHINA HUARONG vs. United Breweries Co | CHINA HUARONG vs. Monster Beverage Corp | CHINA HUARONG vs. LIFEWAY FOODS | CHINA HUARONG vs. National Beverage Corp |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Stocks Directory Find actively traded stocks across global markets |