Correlation Between Medistim ASA and North Energy
Can any of the company-specific risk be diversified away by investing in both Medistim ASA and North Energy 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 Medistim ASA and North Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medistim ASA and North Energy ASA, you can compare the effects of market volatilities on Medistim ASA and North Energy 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 Medistim ASA with a short position of North Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medistim ASA and North Energy.
Diversification Opportunities for Medistim ASA and North Energy
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Medistim and North is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Medistim ASA and North Energy ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North Energy ASA and Medistim 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 Medistim ASA are associated (or correlated) with North Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North Energy ASA has no effect on the direction of Medistim ASA i.e., Medistim ASA and North Energy go up and down completely randomly.
Pair Corralation between Medistim ASA and North Energy
Assuming the 90 days trading horizon Medistim ASA is expected to under-perform the North Energy. In addition to that, Medistim ASA is 1.88 times more volatile than North Energy ASA. It trades about -0.04 of its total potential returns per unit of risk. North Energy ASA is currently generating about 0.03 per unit of volatility. If you would invest 268.00 in North Energy ASA on September 2, 2024 and sell it today you would earn a total of 2.00 from holding North Energy ASA or generate 0.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Medistim ASA vs. North Energy ASA
Performance |
| Timeline |
| Medistim ASA |
| North Energy ASA |
Medistim ASA and North Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medistim ASA and North Energy
The main advantage of trading using opposite Medistim ASA and North Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medistim ASA position performs unexpectedly, North Energy 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 North Energy will offset losses from the drop in North Energy's long position.| Medistim ASA vs. Kitron ASA | Medistim ASA vs. Photocure | Medistim ASA vs. AF Gruppen ASA | Medistim ASA vs. Borregaard ASA |
| North Energy vs. DnB ASA | North Energy vs. Mowi ASA | North Energy vs. Yara International ASA | North Energy vs. Telenor ASA |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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