Correlation Between Mowi ASA and Norsk Hydro
Can any of the company-specific risk be diversified away by investing in both Mowi ASA and Norsk Hydro 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 Mowi ASA and Norsk Hydro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mowi ASA and Norsk Hydro ASA, you can compare the effects of market volatilities on Mowi ASA and Norsk Hydro 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 Mowi ASA with a short position of Norsk Hydro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mowi ASA and Norsk Hydro.
Diversification Opportunities for Mowi ASA and Norsk Hydro
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Mowi and Norsk is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Mowi ASA and Norsk Hydro ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Norsk Hydro ASA and Mowi 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 Mowi ASA are associated (or correlated) with Norsk Hydro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Norsk Hydro ASA has no effect on the direction of Mowi ASA i.e., Mowi ASA and Norsk Hydro go up and down completely randomly.
Pair Corralation between Mowi ASA and Norsk Hydro
Assuming the 90 days trading horizon Mowi ASA is expected to generate 4.09 times less return on investment than Norsk Hydro. But when comparing it to its historical volatility, Mowi ASA is 1.16 times less risky than Norsk Hydro. It trades about 0.02 of its potential returns per unit of risk. Norsk Hydro ASA is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 6,526 in Norsk Hydro ASA on November 27, 2024 and sell it today you would earn a total of 152.00 from holding Norsk Hydro ASA or generate 2.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mowi ASA vs. Norsk Hydro ASA
Performance |
| Timeline |
| Mowi ASA |
| Norsk Hydro ASA |
Mowi ASA and Norsk Hydro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mowi ASA and Norsk Hydro
The main advantage of trading using opposite Mowi ASA and Norsk Hydro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mowi ASA position performs unexpectedly, Norsk Hydro 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 Norsk Hydro will offset losses from the drop in Norsk Hydro's long position.| Mowi ASA vs. SalMar ASA | Mowi ASA vs. Lery Seafood Group | Mowi ASA vs. Pf Bakkafrost | Mowi ASA vs. Grieg Seafood ASA |
| Norsk Hydro vs. Yara International ASA | Norsk Hydro vs. Equinor ASA | Norsk Hydro vs. Telenor ASA | Norsk Hydro vs. Orkla 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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