Correlation Between Leggett Platt and NORDIC HALIBUT
Can any of the company-specific risk be diversified away by investing in both Leggett Platt and NORDIC HALIBUT 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 Leggett Platt and NORDIC HALIBUT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leggett Platt Incorporated and NORDIC HALIBUT AS, you can compare the effects of market volatilities on Leggett Platt and NORDIC HALIBUT 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 Leggett Platt with a short position of NORDIC HALIBUT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leggett Platt and NORDIC HALIBUT.
Diversification Opportunities for Leggett Platt and NORDIC HALIBUT
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Leggett and NORDIC is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Leggett Platt Incorporated and NORDIC HALIBUT AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NORDIC HALIBUT AS and Leggett Platt 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 Leggett Platt Incorporated are associated (or correlated) with NORDIC HALIBUT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NORDIC HALIBUT AS has no effect on the direction of Leggett Platt i.e., Leggett Platt and NORDIC HALIBUT go up and down completely randomly.
Pair Corralation between Leggett Platt and NORDIC HALIBUT
Assuming the 90 days horizon Leggett Platt Incorporated is expected to under-perform the NORDIC HALIBUT. In addition to that, Leggett Platt is 1.36 times more volatile than NORDIC HALIBUT AS. It trades about -0.05 of its total potential returns per unit of risk. NORDIC HALIBUT AS is currently generating about -0.01 per unit of volatility. If you would invest 183.00 in NORDIC HALIBUT AS on September 15, 2024 and sell it today you would lose (26.00) from holding NORDIC HALIBUT AS or give up 14.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leggett Platt Incorporated vs. NORDIC HALIBUT AS
Performance |
| Timeline |
| Leggett Platt |
| NORDIC HALIBUT AS |
Leggett Platt and NORDIC HALIBUT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leggett Platt and NORDIC HALIBUT
The main advantage of trading using opposite Leggett Platt and NORDIC HALIBUT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leggett Platt position performs unexpectedly, NORDIC HALIBUT 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 HALIBUT will offset losses from the drop in NORDIC HALIBUT's long position.| Leggett Platt vs. Superior Plus Corp | Leggett Platt vs. SIVERS SEMICONDUCTORS AB | Leggett Platt vs. NorAm Drilling AS | Leggett Platt vs. Norsk Hydro ASA |
| NORDIC HALIBUT vs. Apple Inc | NORDIC HALIBUT vs. Apple Inc | NORDIC HALIBUT vs. Apple Inc | NORDIC HALIBUT vs. Apple Inc |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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