Correlation Between AcadeMedia and Norion Bank
Can any of the company-specific risk be diversified away by investing in both AcadeMedia and Norion Bank 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 AcadeMedia and Norion Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AcadeMedia AB and Norion Bank, you can compare the effects of market volatilities on AcadeMedia and Norion Bank 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 AcadeMedia with a short position of Norion Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of AcadeMedia and Norion Bank.
Diversification Opportunities for AcadeMedia and Norion Bank
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AcadeMedia and Norion is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding AcadeMedia AB and Norion Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Norion Bank and AcadeMedia 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 AcadeMedia AB are associated (or correlated) with Norion Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Norion Bank has no effect on the direction of AcadeMedia i.e., AcadeMedia and Norion Bank go up and down completely randomly.
Pair Corralation between AcadeMedia and Norion Bank
Assuming the 90 days trading horizon AcadeMedia AB is expected to under-perform the Norion Bank. But the stock apears to be less risky and, when comparing its historical volatility, AcadeMedia AB is 1.94 times less risky than Norion Bank. The stock trades about -0.29 of its potential returns per unit of risk. The Norion Bank is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 4,145 in Norion Bank on September 1, 2024 and sell it today you would lose (210.00) from holding Norion Bank or give up 5.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AcadeMedia AB vs. Norion Bank
Performance |
| Timeline |
| AcadeMedia AB |
| Norion Bank |
AcadeMedia and Norion Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AcadeMedia and Norion Bank
The main advantage of trading using opposite AcadeMedia and Norion Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AcadeMedia position performs unexpectedly, Norion Bank 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 Norion Bank will offset losses from the drop in Norion Bank's long position.| AcadeMedia vs. Inwido AB | AcadeMedia vs. Dometic Group AB | AcadeMedia vs. Byggmax Group AB | AcadeMedia vs. Bravida Holding AB |
| Norion Bank vs. SolTech Energy Sweden | Norion Bank vs. Raketech Group Holding | Norion Bank vs. Invisio Communications AB | Norion Bank vs. Filo Mining 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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