Correlation Between Hexagon Purus and Nidaros Sparebank
Can any of the company-specific risk be diversified away by investing in both Hexagon Purus and Nidaros Sparebank 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 Hexagon Purus and Nidaros Sparebank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hexagon Purus As and Nidaros Sparebank, you can compare the effects of market volatilities on Hexagon Purus and Nidaros Sparebank 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 Hexagon Purus with a short position of Nidaros Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hexagon Purus and Nidaros Sparebank.
Diversification Opportunities for Hexagon Purus and Nidaros Sparebank
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hexagon and Nidaros is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Hexagon Purus As and Nidaros Sparebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nidaros Sparebank and Hexagon Purus 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 Hexagon Purus As are associated (or correlated) with Nidaros Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nidaros Sparebank has no effect on the direction of Hexagon Purus i.e., Hexagon Purus and Nidaros Sparebank go up and down completely randomly.
Pair Corralation between Hexagon Purus and Nidaros Sparebank
Assuming the 90 days trading horizon Hexagon Purus As is expected to under-perform the Nidaros Sparebank. In addition to that, Hexagon Purus is 10.69 times more volatile than Nidaros Sparebank. It trades about -0.31 of its total potential returns per unit of risk. Nidaros Sparebank is currently generating about -0.35 per unit of volatility. If you would invest 10,358 in Nidaros Sparebank on August 31, 2024 and sell it today you would lose (358.00) from holding Nidaros Sparebank or give up 3.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hexagon Purus As vs. Nidaros Sparebank
Performance |
| Timeline |
| Hexagon Purus As |
| Nidaros Sparebank |
Hexagon Purus and Nidaros Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hexagon Purus and Nidaros Sparebank
The main advantage of trading using opposite Hexagon Purus and Nidaros Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hexagon Purus position performs unexpectedly, Nidaros Sparebank 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 Nidaros Sparebank will offset losses from the drop in Nidaros Sparebank's long position.| Hexagon Purus vs. Scana ASA | Hexagon Purus vs. Elkem ASA | Hexagon Purus vs. Integrated Wind Solutions | Hexagon Purus vs. Vow ASA |
| Nidaros Sparebank vs. Sparebank 1 SMN | Nidaros Sparebank vs. Sparebank 1 Nord Norge | Nidaros Sparebank vs. Sparebanken Vest | Nidaros Sparebank vs. Sparebank 1 Ostfold |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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