Correlation Between Multiconsult and NRC Group
Can any of the company-specific risk be diversified away by investing in both Multiconsult and NRC Group 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 Multiconsult and NRC Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multiconsult AS and NRC Group ASA, you can compare the effects of market volatilities on Multiconsult and NRC Group 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 Multiconsult with a short position of NRC Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multiconsult and NRC Group.
Diversification Opportunities for Multiconsult and NRC Group
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Multiconsult and NRC is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Multiconsult AS and NRC Group ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NRC Group ASA and Multiconsult 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 Multiconsult AS are associated (or correlated) with NRC Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NRC Group ASA has no effect on the direction of Multiconsult i.e., Multiconsult and NRC Group go up and down completely randomly.
Pair Corralation between Multiconsult and NRC Group
Assuming the 90 days trading horizon Multiconsult AS is expected to under-perform the NRC Group. But the stock apears to be less risky and, when comparing its historical volatility, Multiconsult AS is 1.58 times less risky than NRC Group. The stock trades about -0.17 of its potential returns per unit of risk. The NRC Group ASA is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 438.00 in NRC Group ASA on November 27, 2024 and sell it today you would earn a total of 60.00 from holding NRC Group ASA or generate 13.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multiconsult AS vs. NRC Group ASA
Performance |
| Timeline |
| Multiconsult AS |
| NRC Group ASA |
Multiconsult and NRC Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multiconsult and NRC Group
The main advantage of trading using opposite Multiconsult and NRC Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multiconsult position performs unexpectedly, NRC Group 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 NRC Group will offset losses from the drop in NRC Group's long position.| Multiconsult vs. Kitron ASA | Multiconsult vs. Veidekke ASA | Multiconsult vs. Europris ASA | Multiconsult vs. AF Gruppen 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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