Correlation Between NAXS Nordic and Investment
Can any of the company-specific risk be diversified away by investing in both NAXS Nordic and Investment 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 NAXS Nordic and Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NAXS Nordic Access and Investment AB Latour, you can compare the effects of market volatilities on NAXS Nordic and Investment 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 NAXS Nordic with a short position of Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of NAXS Nordic and Investment.
Diversification Opportunities for NAXS Nordic and Investment
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NAXS and Investment is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding NAXS Nordic Access and Investment AB Latour in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investment AB Latour and NAXS Nordic 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 NAXS Nordic Access are associated (or correlated) with Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investment AB Latour has no effect on the direction of NAXS Nordic i.e., NAXS Nordic and Investment go up and down completely randomly.
Pair Corralation between NAXS Nordic and Investment
Assuming the 90 days trading horizon NAXS Nordic Access is expected to generate 0.38 times more return on investment than Investment. However, NAXS Nordic Access is 2.6 times less risky than Investment. It trades about -0.1 of its potential returns per unit of risk. Investment AB Latour is currently generating about -0.13 per unit of risk. If you would invest 5,260 in NAXS Nordic Access on September 4, 2024 and sell it today you would lose (80.00) from holding NAXS Nordic Access or give up 1.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
NAXS Nordic Access vs. Investment AB Latour
Performance |
| Timeline |
| NAXS Nordic Access |
| Investment AB Latour |
NAXS Nordic and Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NAXS Nordic and Investment
The main advantage of trading using opposite NAXS Nordic and Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NAXS Nordic position performs unexpectedly, Investment 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 Investment will offset losses from the drop in Investment's long position.| NAXS Nordic vs. Bure Equity AB | NAXS Nordic vs. Creades AB | NAXS Nordic vs. L E Lundbergfretagen | NAXS Nordic vs. Industrivarden AB ser |
| Investment vs. L E Lundbergfretagen | Investment vs. Industrivarden AB ser | Investment vs. Svenska Handelsbanken AB | Investment vs. Investor 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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