Correlation Between INTERSHOP Communications and NorAm Drilling
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By analyzing existing cross correlation between INTERSHOP Communications Aktiengesellschaft and NorAm Drilling AS, you can compare the effects of market volatilities on INTERSHOP Communications and NorAm Drilling 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 INTERSHOP Communications with a short position of NorAm Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTERSHOP Communications and NorAm Drilling.
Diversification Opportunities for INTERSHOP Communications and NorAm Drilling
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between INTERSHOP and NorAm is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding INTERSHOP Communications Aktie and NorAm Drilling AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NorAm Drilling AS and INTERSHOP Communications 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 INTERSHOP Communications Aktiengesellschaft are associated (or correlated) with NorAm Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NorAm Drilling AS has no effect on the direction of INTERSHOP Communications i.e., INTERSHOP Communications and NorAm Drilling go up and down completely randomly.
Pair Corralation between INTERSHOP Communications and NorAm Drilling
Assuming the 90 days trading horizon INTERSHOP Communications Aktiengesellschaft is expected to under-perform the NorAm Drilling. But the stock apears to be less risky and, when comparing its historical volatility, INTERSHOP Communications Aktiengesellschaft is 1.4 times less risky than NorAm Drilling. The stock trades about -0.01 of its potential returns per unit of risk. The NorAm Drilling AS is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 33.00 in NorAm Drilling AS on October 16, 2024 and sell it today you would earn a total of 280.00 from holding NorAm Drilling AS or generate 848.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
INTERSHOP Communications Aktie vs. NorAm Drilling AS
Performance |
| Timeline |
| INTERSHOP Communications |
| NorAm Drilling AS |
INTERSHOP Communications and NorAm Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTERSHOP Communications and NorAm Drilling
The main advantage of trading using opposite INTERSHOP Communications and NorAm Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTERSHOP Communications position performs unexpectedly, NorAm Drilling 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 NorAm Drilling will offset losses from the drop in NorAm Drilling's long position.The idea behind INTERSHOP Communications Aktiengesellschaft and NorAm Drilling AS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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