Correlation Between Arctic Blue and Nitro Games
Can any of the company-specific risk be diversified away by investing in both Arctic Blue and Nitro Games 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 Arctic Blue and Nitro Games into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arctic Blue Beverages and Nitro Games Oyj, you can compare the effects of market volatilities on Arctic Blue and Nitro Games 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 Arctic Blue with a short position of Nitro Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arctic Blue and Nitro Games.
Diversification Opportunities for Arctic Blue and Nitro Games
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Arctic and Nitro is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Arctic Blue Beverages and Nitro Games Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nitro Games Oyj and Arctic Blue 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 Arctic Blue Beverages are associated (or correlated) with Nitro Games. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nitro Games Oyj has no effect on the direction of Arctic Blue i.e., Arctic Blue and Nitro Games go up and down completely randomly.
Pair Corralation between Arctic Blue and Nitro Games
Assuming the 90 days trading horizon Arctic Blue Beverages is expected to under-perform the Nitro Games. But the stock apears to be less risky and, when comparing its historical volatility, Arctic Blue Beverages is 1.09 times less risky than Nitro Games. The stock trades about -0.5 of its potential returns per unit of risk. The Nitro Games Oyj is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 240.00 in Nitro Games Oyj on August 30, 2024 and sell it today you would earn a total of 16.00 from holding Nitro Games Oyj or generate 6.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arctic Blue Beverages vs. Nitro Games Oyj
Performance |
| Timeline |
| Arctic Blue Beverages |
| Nitro Games Oyj |
Arctic Blue and Nitro Games Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arctic Blue and Nitro Games
The main advantage of trading using opposite Arctic Blue and Nitro Games positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arctic Blue position performs unexpectedly, Nitro Games 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 Nitro Games will offset losses from the drop in Nitro Games' long position.| Arctic Blue vs. Cint Group AB | Arctic Blue vs. Nordic Waterproofing Holding | Arctic Blue vs. RVRC Holding AB | Arctic Blue vs. Inwido AB |
| Nitro Games vs. Stillfront Group AB | Nitro Games vs. G5 Entertainment publ | Nitro Games vs. Enad Global 7 | Nitro Games vs. Starbreeze AB |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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