Correlation Between Nordic Asia and Investor
Can any of the company-specific risk be diversified away by investing in both Nordic Asia and Investor 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 Nordic Asia and Investor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nordic Asia Investment and Investor AB ser, you can compare the effects of market volatilities on Nordic Asia and Investor 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 Nordic Asia with a short position of Investor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Asia and Investor.
Diversification Opportunities for Nordic Asia and Investor
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nordic and Investor is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Asia Investment and Investor AB ser in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investor AB ser and Nordic Asia 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 Nordic Asia Investment are associated (or correlated) with Investor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investor AB ser has no effect on the direction of Nordic Asia i.e., Nordic Asia and Investor go up and down completely randomly.
Pair Corralation between Nordic Asia and Investor
Assuming the 90 days trading horizon Nordic Asia Investment is expected to under-perform the Investor. In addition to that, Nordic Asia is 2.34 times more volatile than Investor AB ser. It trades about -0.04 of its total potential returns per unit of risk. Investor AB ser is currently generating about 0.21 per unit of volatility. If you would invest 29,270 in Investor AB ser on November 30, 2024 and sell it today you would earn a total of 2,705 from holding Investor AB ser or generate 9.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordic Asia Investment vs. Investor AB ser
Performance |
| Timeline |
| Nordic Asia Investment |
| Investor AB ser |
Nordic Asia and Investor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Asia and Investor
The main advantage of trading using opposite Nordic Asia and Investor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Asia position performs unexpectedly, Investor 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 Investor will offset losses from the drop in Investor's long position.| Nordic Asia vs. Addtech AB | Nordic Asia vs. Lea Bank AB | Nordic Asia vs. Lundin Mining | Nordic Asia vs. New Nordic Healthbrands |
| Investor vs. Kinnevik Investment AB | Investor vs. Investment AB Latour | Investor vs. Samhllsbyggnadsbolaget i Norden | Investor vs. Industrivarden AB ser |
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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