Correlation Between Indutrade and NORDIC HALIBUT
Can any of the company-specific risk be diversified away by investing in both Indutrade and NORDIC HALIBUT 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 Indutrade and NORDIC HALIBUT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indutrade AB and NORDIC HALIBUT AS, you can compare the effects of market volatilities on Indutrade and NORDIC HALIBUT 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 Indutrade with a short position of NORDIC HALIBUT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indutrade and NORDIC HALIBUT.
Diversification Opportunities for Indutrade and NORDIC HALIBUT
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Indutrade and NORDIC is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Indutrade AB and NORDIC HALIBUT AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NORDIC HALIBUT AS and Indutrade 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 Indutrade AB are associated (or correlated) with NORDIC HALIBUT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NORDIC HALIBUT AS has no effect on the direction of Indutrade i.e., Indutrade and NORDIC HALIBUT go up and down completely randomly.
Pair Corralation between Indutrade and NORDIC HALIBUT
Assuming the 90 days horizon Indutrade AB is expected to generate 0.8 times more return on investment than NORDIC HALIBUT. However, Indutrade AB is 1.25 times less risky than NORDIC HALIBUT. It trades about 0.04 of its potential returns per unit of risk. NORDIC HALIBUT AS is currently generating about -0.01 per unit of risk. If you would invest 2,061 in Indutrade AB on September 12, 2024 and sell it today you would earn a total of 365.00 from holding Indutrade AB or generate 17.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indutrade AB vs. NORDIC HALIBUT AS
Performance |
| Timeline |
| Indutrade AB |
| NORDIC HALIBUT AS |
Indutrade and NORDIC HALIBUT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indutrade and NORDIC HALIBUT
The main advantage of trading using opposite Indutrade and NORDIC HALIBUT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indutrade position performs unexpectedly, NORDIC HALIBUT 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 HALIBUT will offset losses from the drop in NORDIC HALIBUT's long position.| Indutrade vs. WATSCO INC B | Indutrade vs. Superior Plus Corp | Indutrade vs. SIVERS SEMICONDUCTORS AB | Indutrade vs. NorAm Drilling AS |
| NORDIC HALIBUT vs. BJs Wholesale Club | NORDIC HALIBUT vs. Ross Stores | NORDIC HALIBUT vs. PICKN PAY STORES | NORDIC HALIBUT vs. Solstad Offshore 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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