Correlation Between Holand Og and Nordic Mining
Can any of the company-specific risk be diversified away by investing in both Holand Og 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 Holand Og and Nordic Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Holand og Setskog and Nordic Mining ASA, you can compare the effects of market volatilities on Holand Og 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 Holand Og with a short position of Nordic Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Holand Og and Nordic Mining.
Diversification Opportunities for Holand Og and Nordic Mining
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Holand and Nordic is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Holand og Setskog 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 Holand Og 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 Holand og Setskog 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 Holand Og i.e., Holand Og and Nordic Mining go up and down completely randomly.
Pair Corralation between Holand Og and Nordic Mining
Assuming the 90 days trading horizon Holand og Setskog is expected to generate 0.83 times more return on investment than Nordic Mining. However, Holand og Setskog is 1.21 times less risky than Nordic Mining. It trades about 0.13 of its potential returns per unit of risk. Nordic Mining ASA is currently generating about -0.67 per unit of risk. If you would invest 14,000 in Holand og Setskog on October 25, 2024 and sell it today you would earn a total of 500.00 from holding Holand og Setskog or generate 3.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Holand og Setskog vs. Nordic Mining ASA
Performance |
| Timeline |
| Holand og Setskog |
| Nordic Mining ASA |
Holand Og and Nordic Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Holand Og and Nordic Mining
The main advantage of trading using opposite Holand Og and Nordic Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Holand Og 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.| Holand Og vs. Melhus Sparebank | Holand Og vs. Aurskog Sparebank | Holand Og vs. Sparebanken Sor | Holand Og vs. Sparebank 1 Ringerike |
| Nordic Mining vs. Clean Seas Seafood | Nordic Mining vs. BW Offshore | Nordic Mining vs. Instabank ASA | Nordic Mining vs. Jaeren Sparebank |
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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