Correlation Between Metro AG and NORDIC HALIBUT
Can any of the company-specific risk be diversified away by investing in both Metro AG and NORDIC HALIBUT 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 Metro AG and NORDIC HALIBUT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metro AG and NORDIC HALIBUT AS, you can compare the effects of market volatilities on Metro AG and NORDIC HALIBUT 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 Metro AG with a short position of NORDIC HALIBUT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metro AG and NORDIC HALIBUT.
Diversification Opportunities for Metro AG and NORDIC HALIBUT
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Metro and NORDIC is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Metro AG and NORDIC HALIBUT AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NORDIC HALIBUT AS and Metro AG 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 Metro AG are associated (or correlated) with NORDIC HALIBUT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NORDIC HALIBUT AS has no effect on the direction of Metro AG i.e., Metro AG and NORDIC HALIBUT go up and down completely randomly.
Pair Corralation between Metro AG and NORDIC HALIBUT
Assuming the 90 days trading horizon Metro AG is expected to under-perform the NORDIC HALIBUT. In addition to that, Metro AG is 1.1 times more volatile than NORDIC HALIBUT AS. It trades about -0.01 of its total potential returns per unit of risk. NORDIC HALIBUT AS is currently generating about 0.0 per unit of volatility. If you would invest 202.00 in NORDIC HALIBUT AS on September 19, 2024 and sell it today you would lose (37.00) from holding NORDIC HALIBUT AS or give up 18.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metro AG vs. NORDIC HALIBUT AS
Performance |
| Timeline |
| Metro AG |
| NORDIC HALIBUT AS |
Metro AG and NORDIC HALIBUT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metro AG and NORDIC HALIBUT
The main advantage of trading using opposite Metro AG and NORDIC HALIBUT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metro AG position performs unexpectedly, NORDIC HALIBUT 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 NORDIC HALIBUT will offset losses from the drop in NORDIC HALIBUT's long position.| Metro AG vs. TYSON FOODS A | Metro AG vs. JJ SNACK FOODS | Metro AG vs. National Beverage Corp | Metro AG vs. Entravision Communications |
| NORDIC HALIBUT vs. Apple Inc | NORDIC HALIBUT vs. Apple Inc | NORDIC HALIBUT vs. Apple Inc | NORDIC HALIBUT vs. Apple 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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