Correlation Between NEL ASA and Jupiter Energy
Can any of the company-specific risk be diversified away by investing in both NEL ASA and Jupiter Energy 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 Jupiter Energy 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 Jupiter Energy Limited, you can compare the effects of market volatilities on NEL ASA and Jupiter Energy 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 Jupiter Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEL ASA and Jupiter Energy.
Diversification Opportunities for NEL ASA and Jupiter Energy
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NEL and Jupiter is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding NEL ASA ADR30 and Jupiter Energy Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jupiter Energy 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 Jupiter Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jupiter Energy has no effect on the direction of NEL ASA i.e., NEL ASA and Jupiter Energy go up and down completely randomly.
Pair Corralation between NEL ASA and Jupiter Energy
Assuming the 90 days trading horizon NEL ASA ADR30 is expected to under-perform the Jupiter Energy. But the stock apears to be less risky and, when comparing its historical volatility, NEL ASA ADR30 is 4.9 times less risky than Jupiter Energy. The stock trades about -0.18 of its potential returns per unit of risk. The Jupiter Energy Limited is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1.10 in Jupiter Energy Limited on October 24, 2024 and sell it today you would earn a total of 0.10 from holding Jupiter Energy Limited or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
NEL ASA ADR30 vs. Jupiter Energy Limited
Performance |
| Timeline |
| NEL ASA ADR30 |
| Jupiter Energy |
NEL ASA and Jupiter Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEL ASA and Jupiter Energy
The main advantage of trading using opposite NEL ASA and Jupiter Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEL ASA position performs unexpectedly, Jupiter Energy 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 Jupiter Energy will offset losses from the drop in Jupiter Energy's long position.| NEL ASA vs. Chesapeake Utilities | NEL ASA vs. NORTHEAST UTILITIES | NEL ASA vs. CyberArk Software | NEL ASA vs. Rayonier Advanced Materials |
| Jupiter Energy vs. Khiron Life Sciences | Jupiter Energy vs. Guangdong Investment Limited | Jupiter Energy vs. The Japan Steel | Jupiter Energy vs. Olympic Steel |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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