Correlation Between NEL ASA and Yellow Pages
Can any of the company-specific risk be diversified away by investing in both NEL ASA and Yellow Pages 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 Yellow Pages 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 Yellow Pages Limited, you can compare the effects of market volatilities on NEL ASA and Yellow Pages 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 Yellow Pages. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEL ASA and Yellow Pages.
Diversification Opportunities for NEL ASA and Yellow Pages
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NEL and Yellow is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding NEL ASA ADR30 and Yellow Pages Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yellow Pages Limited 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 Yellow Pages. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yellow Pages Limited has no effect on the direction of NEL ASA i.e., NEL ASA and Yellow Pages go up and down completely randomly.
Pair Corralation between NEL ASA and Yellow Pages
Assuming the 90 days trading horizon NEL ASA ADR30 is expected to under-perform the Yellow Pages. In addition to that, NEL ASA is 3.62 times more volatile than Yellow Pages Limited. It trades about -0.04 of its total potential returns per unit of risk. Yellow Pages Limited is currently generating about 0.02 per unit of volatility. If you would invest 676.00 in Yellow Pages Limited on August 31, 2024 and sell it today you would earn a total of 54.00 from holding Yellow Pages Limited or generate 7.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.74% |
| Values | Daily Returns |
NEL ASA ADR30 vs. Yellow Pages Limited
Performance |
| Timeline |
| NEL ASA ADR30 |
| Yellow Pages Limited |
NEL ASA and Yellow Pages Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEL ASA and Yellow Pages
The main advantage of trading using opposite NEL ASA and Yellow Pages positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEL ASA position performs unexpectedly, Yellow Pages 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 Yellow Pages will offset losses from the drop in Yellow Pages' long position.| NEL ASA vs. CarsalesCom | NEL ASA vs. Southwest Airlines Co | NEL ASA vs. United Airlines Holdings | NEL ASA vs. Salesforce |
| Yellow Pages vs. TROPHY GAMES DEV | Yellow Pages vs. Air Transport Services | Yellow Pages vs. QIIWI GAMES AB | Yellow Pages vs. Media and Games |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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