Correlation Between Ice Fish and North Energy
Can any of the company-specific risk be diversified away by investing in both Ice Fish and North Energy 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 Ice Fish and North Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ice Fish Farm and North Energy ASA, you can compare the effects of market volatilities on Ice Fish and North Energy 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 Ice Fish with a short position of North Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ice Fish and North Energy.
Diversification Opportunities for Ice Fish and North Energy
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ice and North is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Ice Fish Farm and North Energy ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North Energy ASA and Ice Fish 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 Ice Fish Farm are associated (or correlated) with North Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North Energy ASA has no effect on the direction of Ice Fish i.e., Ice Fish and North Energy go up and down completely randomly.
Pair Corralation between Ice Fish and North Energy
Assuming the 90 days trading horizon Ice Fish Farm is expected to generate 3.51 times more return on investment than North Energy. However, Ice Fish is 3.51 times more volatile than North Energy ASA. It trades about 0.09 of its potential returns per unit of risk. North Energy ASA is currently generating about 0.13 per unit of risk. If you would invest 2,420 in Ice Fish Farm on August 29, 2024 and sell it today you would earn a total of 360.00 from holding Ice Fish Farm or generate 14.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.67% |
| Values | Daily Returns |
Ice Fish Farm vs. North Energy ASA
Performance |
| Timeline |
| Ice Fish Farm |
| North Energy ASA |
Ice Fish and North Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ice Fish and North Energy
The main advantage of trading using opposite Ice Fish and North Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ice Fish position performs unexpectedly, North Energy 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 North Energy will offset losses from the drop in North Energy's long position.| Ice Fish vs. Masoval AS | Ice Fish vs. Arctic Fish Holding | Ice Fish vs. Elkem ASA | Ice Fish vs. DNB NOR KAPFORV |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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