Correlation Between International Business and NORSK
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By analyzing existing cross correlation between International Business Machines and NORSK HYDRO A, you can compare the effects of market volatilities on International Business and NORSK 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 International Business with a short position of NORSK. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Business and NORSK.
Diversification Opportunities for International Business and NORSK
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between International and NORSK is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding International Business Machine and NORSK HYDRO A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NORSK HYDRO A and International Business 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 International Business Machines are associated (or correlated) with NORSK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NORSK HYDRO A has no effect on the direction of International Business i.e., International Business and NORSK go up and down completely randomly.
Pair Corralation between International Business and NORSK
Considering the 90-day investment horizon International Business Machines is expected to generate 1.84 times more return on investment than NORSK. However, International Business is 1.84 times more volatile than NORSK HYDRO A. It trades about 0.1 of its potential returns per unit of risk. NORSK HYDRO A is currently generating about -0.01 per unit of risk. If you would invest 18,148 in International Business Machines on November 5, 2024 and sell it today you would earn a total of 7,422 from holding International Business Machines or generate 40.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 66.26% |
| Values | Daily Returns |
International Business Machine vs. NORSK HYDRO A
Performance |
| Timeline |
| International Business |
| NORSK HYDRO A |
International Business and NORSK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Business and NORSK
The main advantage of trading using opposite International Business and NORSK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Business position performs unexpectedly, NORSK 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 NORSK will offset losses from the drop in NORSK's long position.| International Business vs. EPAM Systems | International Business vs. Infosys Ltd ADR | International Business vs. Cognizant Technology Solutions | International Business vs. FiscalNote Holdings |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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