Correlation Between NEL ASA and New York
Can any of the company-specific risk be diversified away by investing in both NEL ASA and New York 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 New York 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 The New York, you can compare the effects of market volatilities on NEL ASA and New York 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 New York. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEL ASA and New York.
Diversification Opportunities for NEL ASA and New York
Excellent diversification
The 3 months correlation between NEL and New is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding NEL ASA ADR30 and The New York in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New York 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 New York. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New York has no effect on the direction of NEL ASA i.e., NEL ASA and New York go up and down completely randomly.
Pair Corralation between NEL ASA and New York
Assuming the 90 days trading horizon NEL ASA ADR30 is expected to under-perform the New York. In addition to that, NEL ASA is 3.07 times more volatile than The New York. It trades about -0.17 of its total potential returns per unit of risk. The New York is currently generating about 0.05 per unit of volatility. If you would invest 5,120 in The New York on August 29, 2024 and sell it today you would earn a total of 106.00 from holding The New York or generate 2.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NEL ASA ADR30 vs. The New York
Performance |
| Timeline |
| NEL ASA ADR30 |
| New York |
NEL ASA and New York Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEL ASA and New York
The main advantage of trading using opposite NEL ASA and New York positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEL ASA position performs unexpectedly, New York 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 New York will offset losses from the drop in New York's long position.| NEL ASA vs. Superior Plus Corp | NEL ASA vs. NMI Holdings | NEL ASA vs. SIVERS SEMICONDUCTORS AB | NEL ASA vs. Talanx AG |
| New York vs. MAGNUM MINING EXP | New York vs. SBM OFFSHORE | New York vs. MCEWEN MINING INC | New York vs. RYU Apparel |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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