Correlation Between Immofinanz and Norsk Hydro
Can any of the company-specific risk be diversified away by investing in both Immofinanz and Norsk Hydro 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 Immofinanz and Norsk Hydro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Immofinanz AG and Norsk Hydro ASA, you can compare the effects of market volatilities on Immofinanz and Norsk Hydro 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 Immofinanz with a short position of Norsk Hydro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Immofinanz and Norsk Hydro.
Diversification Opportunities for Immofinanz and Norsk Hydro
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Immofinanz and Norsk is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Immofinanz AG and Norsk Hydro ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Norsk Hydro ASA and Immofinanz 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 Immofinanz AG are associated (or correlated) with Norsk Hydro. 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 ASA has no effect on the direction of Immofinanz i.e., Immofinanz and Norsk Hydro go up and down completely randomly.
Pair Corralation between Immofinanz and Norsk Hydro
Assuming the 90 days trading horizon Immofinanz AG is expected to generate 0.5 times more return on investment than Norsk Hydro. However, Immofinanz AG is 2.02 times less risky than Norsk Hydro. It trades about 0.15 of its potential returns per unit of risk. Norsk Hydro ASA is currently generating about 0.07 per unit of risk. If you would invest 1,500 in Immofinanz AG on September 1, 2024 and sell it today you would earn a total of 78.00 from holding Immofinanz AG or generate 5.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Immofinanz AG vs. Norsk Hydro ASA
Performance |
| Timeline |
| Immofinanz AG |
| Norsk Hydro ASA |
Immofinanz and Norsk Hydro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Immofinanz and Norsk Hydro
The main advantage of trading using opposite Immofinanz and Norsk Hydro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Immofinanz position performs unexpectedly, Norsk Hydro 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 Hydro will offset losses from the drop in Norsk Hydro's long position.| Immofinanz vs. OPEN HOUSE GROUP | Immofinanz vs. Superior Plus Corp | Immofinanz vs. NMI Holdings | Immofinanz vs. Origin Agritech |
| Norsk Hydro vs. Austevoll Seafood ASA | Norsk Hydro vs. Performance Food Group | Norsk Hydro vs. Collins Foods Limited | Norsk Hydro vs. Vulcan Materials |
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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