Correlation Between Grong Sparebank and Nordic Mining
Can any of the company-specific risk be diversified away by investing in both Grong Sparebank and Nordic Mining 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 Grong Sparebank and Nordic Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grong Sparebank and Nordic Mining ASA, you can compare the effects of market volatilities on Grong Sparebank and Nordic Mining 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 Grong Sparebank with a short position of Nordic Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grong Sparebank and Nordic Mining.
Diversification Opportunities for Grong Sparebank and Nordic Mining
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Grong and Nordic is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Grong Sparebank and Nordic Mining ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordic Mining ASA and Grong Sparebank 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 Grong Sparebank are associated (or correlated) with Nordic Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordic Mining ASA has no effect on the direction of Grong Sparebank i.e., Grong Sparebank and Nordic Mining go up and down completely randomly.
Pair Corralation between Grong Sparebank and Nordic Mining
Assuming the 90 days trading horizon Grong Sparebank is expected to generate 0.79 times more return on investment than Nordic Mining. However, Grong Sparebank is 1.27 times less risky than Nordic Mining. It trades about 0.01 of its potential returns per unit of risk. Nordic Mining ASA is currently generating about -0.06 per unit of risk. If you would invest 14,998 in Grong Sparebank on August 29, 2024 and sell it today you would lose (2.00) from holding Grong Sparebank or give up 0.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grong Sparebank vs. Nordic Mining ASA
Performance |
| Timeline |
| Grong Sparebank |
| Nordic Mining ASA |
Grong Sparebank and Nordic Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grong Sparebank and Nordic Mining
The main advantage of trading using opposite Grong Sparebank and Nordic Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grong Sparebank position performs unexpectedly, Nordic Mining 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 Mining will offset losses from the drop in Nordic Mining's long position.| Grong Sparebank vs. DnB ASA | Grong Sparebank vs. Sparebank 1 SR | Grong Sparebank vs. Sparebank 1 SMN | Grong Sparebank vs. Sparebanken Mre |
| Nordic Mining vs. Elkem ASA | Nordic Mining vs. DNB NOR KAPFORV | Nordic Mining vs. Integrated Wind Solutions | Nordic Mining vs. Vow ASA |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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