Correlation Between Instabank ASA and Nordic Unmanned
Can any of the company-specific risk be diversified away by investing in both Instabank ASA and Nordic Unmanned 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 Unmanned 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 Unmanned As, you can compare the effects of market volatilities on Instabank ASA and Nordic Unmanned 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 Unmanned. Check out your portfolio center. Please also check ongoing floating volatility patterns of Instabank ASA and Nordic Unmanned.
Diversification Opportunities for Instabank ASA and Nordic Unmanned
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Instabank and Nordic is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Instabank ASA and Nordic Unmanned As in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordic Unmanned As 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 Unmanned. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordic Unmanned As has no effect on the direction of Instabank ASA i.e., Instabank ASA and Nordic Unmanned go up and down completely randomly.
Pair Corralation between Instabank ASA and Nordic Unmanned
Assuming the 90 days trading horizon Instabank ASA is expected to generate 0.06 times more return on investment than Nordic Unmanned. However, Instabank ASA is 15.6 times less risky than Nordic Unmanned. It trades about 0.08 of its potential returns per unit of risk. Nordic Unmanned As is currently generating about -0.03 per unit of risk. If you would invest 194.00 in Instabank ASA on September 5, 2024 and sell it today you would earn a total of 4.00 from holding Instabank ASA or generate 2.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Instabank ASA vs. Nordic Unmanned As
Performance |
| Timeline |
| Instabank ASA |
| Nordic Unmanned As |
Instabank ASA and Nordic Unmanned Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Instabank ASA and Nordic Unmanned
The main advantage of trading using opposite Instabank ASA and Nordic Unmanned positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Instabank ASA position performs unexpectedly, Nordic Unmanned 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 Unmanned will offset losses from the drop in Nordic Unmanned's long position.| Instabank ASA vs. Norwegian Air Shuttle | Instabank ASA vs. Grieg Seafood ASA | Instabank ASA vs. Beerenberg AS | Instabank ASA vs. Shelf Drilling |
| Nordic Unmanned vs. Sea1 Offshore | Nordic Unmanned vs. Nordic Mining ASA | Nordic Unmanned vs. Instabank ASA | Nordic Unmanned vs. Norwegian Air Shuttle |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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