Correlation Between NEL ASA and STRAITS TRADG
Can any of the company-specific risk be diversified away by investing in both NEL ASA and STRAITS TRADG 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 STRAITS TRADG 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 STRAITS TRADG SD, you can compare the effects of market volatilities on NEL ASA and STRAITS TRADG 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 STRAITS TRADG. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEL ASA and STRAITS TRADG.
Diversification Opportunities for NEL ASA and STRAITS TRADG
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NEL and STRAITS is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding NEL ASA ADR30 and STRAITS TRADG SD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STRAITS TRADG SD 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 STRAITS TRADG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STRAITS TRADG SD has no effect on the direction of NEL ASA i.e., NEL ASA and STRAITS TRADG go up and down completely randomly.
Pair Corralation between NEL ASA and STRAITS TRADG
Assuming the 90 days trading horizon NEL ASA ADR30 is expected to under-perform the STRAITS TRADG. In addition to that, NEL ASA is 3.61 times more volatile than STRAITS TRADG SD. It trades about -0.03 of its total potential returns per unit of risk. STRAITS TRADG SD is currently generating about -0.02 per unit of volatility. If you would invest 113.00 in STRAITS TRADG SD on August 24, 2024 and sell it today you would lose (14.00) from holding STRAITS TRADG SD or give up 12.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NEL ASA ADR30 vs. STRAITS TRADG SD
Performance |
| Timeline |
| NEL ASA ADR30 |
| STRAITS TRADG SD |
NEL ASA and STRAITS TRADG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEL ASA and STRAITS TRADG
The main advantage of trading using opposite NEL ASA and STRAITS TRADG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEL ASA position performs unexpectedly, STRAITS TRADG 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 STRAITS TRADG will offset losses from the drop in STRAITS TRADG's long position.| NEL ASA vs. Marie Brizard Wine | NEL ASA vs. Comba Telecom Systems | NEL ASA vs. VIRGIN WINES UK | NEL ASA vs. NAKED WINES PLC |
| STRAITS TRADG vs. Lion One Metals | STRAITS TRADG vs. AXWAY SOFTWARE EO | STRAITS TRADG vs. CarsalesCom | STRAITS TRADG vs. GRUPO CARSO A1 |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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