Correlation Between NEL ASA and Superior Plus
Can any of the company-specific risk be diversified away by investing in both NEL ASA and Superior Plus 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 NEL ASA and Superior Plus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NEL ASA ADR30 and Superior Plus Corp, you can compare the effects of market volatilities on NEL ASA and Superior Plus 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 NEL ASA with a short position of Superior Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEL ASA and Superior Plus.
Diversification Opportunities for NEL ASA and Superior Plus
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NEL and Superior is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding NEL ASA ADR30 and Superior Plus Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Superior Plus Corp and NEL ASA 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 NEL ASA ADR30 are associated (or correlated) with Superior Plus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Superior Plus Corp has no effect on the direction of NEL ASA i.e., NEL ASA and Superior Plus go up and down completely randomly.
Pair Corralation between NEL ASA and Superior Plus
Assuming the 90 days trading horizon NEL ASA ADR30 is expected to under-perform the Superior Plus. In addition to that, NEL ASA is 2.82 times more volatile than Superior Plus Corp. It trades about -0.03 of its total potential returns per unit of risk. Superior Plus Corp is currently generating about -0.05 per unit of volatility. If you would invest 578.00 in Superior Plus Corp on August 27, 2024 and sell it today you would lose (168.00) from holding Superior Plus Corp or give up 29.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NEL ASA ADR30 vs. Superior Plus Corp
Performance |
| Timeline |
| NEL ASA ADR30 |
| Superior Plus Corp |
NEL ASA and Superior Plus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEL ASA and Superior Plus
The main advantage of trading using opposite NEL ASA and Superior Plus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEL ASA position performs unexpectedly, Superior Plus 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 Superior Plus will offset losses from the drop in Superior Plus' long position.| NEL ASA vs. Superior Plus Corp | NEL ASA vs. NMI Holdings | NEL ASA vs. Origin Agritech | NEL ASA vs. SIVERS SEMICONDUCTORS AB |
| Superior Plus vs. LION ONE METALS | Superior Plus vs. Zijin Mining Group | Superior Plus vs. SBI Insurance Group | Superior Plus vs. HANOVER INSURANCE |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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