Correlation Between Green Minerals and Nordic Technology
Can any of the company-specific risk be diversified away by investing in both Green Minerals and Nordic Technology 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 Green Minerals and Nordic Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Green Minerals AS and Nordic Technology Group, you can compare the effects of market volatilities on Green Minerals and Nordic Technology 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 Green Minerals with a short position of Nordic Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Green Minerals and Nordic Technology.
Diversification Opportunities for Green Minerals and Nordic Technology
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Green and Nordic is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Green Minerals AS and Nordic Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordic Technology and Green Minerals 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 Green Minerals AS are associated (or correlated) with Nordic Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordic Technology has no effect on the direction of Green Minerals i.e., Green Minerals and Nordic Technology go up and down completely randomly.
Pair Corralation between Green Minerals and Nordic Technology
Assuming the 90 days trading horizon Green Minerals AS is expected to generate 0.62 times more return on investment than Nordic Technology. However, Green Minerals AS is 1.62 times less risky than Nordic Technology. It trades about 0.05 of its potential returns per unit of risk. Nordic Technology Group is currently generating about -0.01 per unit of risk. If you would invest 530.00 in Green Minerals AS on September 3, 2024 and sell it today you would earn a total of 120.00 from holding Green Minerals AS or generate 22.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Green Minerals AS vs. Nordic Technology Group
Performance |
| Timeline |
| Green Minerals AS |
| Nordic Technology |
Green Minerals and Nordic Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Green Minerals and Nordic Technology
The main advantage of trading using opposite Green Minerals and Nordic Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Green Minerals position performs unexpectedly, Nordic Technology 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 Nordic Technology will offset losses from the drop in Nordic Technology's long position.| Green Minerals vs. Rana Gruber AS | Green Minerals vs. Romsdal Sparebank | Green Minerals vs. Elkem ASA | Green Minerals vs. Integrated Wind Solutions |
| Nordic Technology vs. Nordic Halibut AS | Nordic Technology vs. Nordic Semiconductor ASA | Nordic Technology vs. Nordic Mining ASA | Nordic Technology vs. Nordic Aqua Partners |
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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