Correlation Between Instabank ASA and Nordic Technology
Can any of the company-specific risk be diversified away by investing in both Instabank ASA and Nordic Technology 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 Instabank ASA and Nordic Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Instabank ASA and Nordic Technology Group, you can compare the effects of market volatilities on Instabank ASA and Nordic Technology 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 Instabank ASA with a short position of Nordic Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Instabank ASA and Nordic Technology.
Diversification Opportunities for Instabank ASA and Nordic Technology
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Instabank and Nordic is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Instabank ASA and Nordic Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordic Technology and Instabank ASA 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 Instabank ASA are associated (or correlated) with Nordic Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordic Technology has no effect on the direction of Instabank ASA i.e., Instabank ASA and Nordic Technology go up and down completely randomly.
Pair Corralation between Instabank ASA and Nordic Technology
Assuming the 90 days trading horizon Instabank ASA is expected to generate 0.41 times more return on investment than Nordic Technology. However, Instabank ASA is 2.47 times less risky than Nordic Technology. It trades about 0.03 of its potential returns per unit of risk. Nordic Technology Group is currently generating about -0.02 per unit of risk. If you would invest 166.00 in Instabank ASA on September 3, 2024 and sell it today you would earn a total of 29.00 from holding Instabank ASA or generate 17.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Instabank ASA vs. Nordic Technology Group
Performance |
| Timeline |
| Instabank ASA |
| Nordic Technology |
Instabank ASA and Nordic Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Instabank ASA and Nordic Technology
The main advantage of trading using opposite Instabank ASA and Nordic Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Instabank ASA position performs unexpectedly, Nordic Technology 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 Technology will offset losses from the drop in Nordic Technology's long position.| Instabank ASA vs. SD Standard Drilling | Instabank ASA vs. Gaming Innovation Group | Instabank ASA vs. Eidesvik Offshore ASA | Instabank ASA vs. Norwegian Air Shuttle |
| Nordic Technology vs. Nordic Halibut AS | Nordic Technology vs. Nordic Semiconductor ASA | Nordic Technology vs. Nordic Mining ASA | Nordic Technology vs. Nordic Aqua Partners |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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