Correlation Between NAXS Nordic and L E
Can any of the company-specific risk be diversified away by investing in both NAXS Nordic and L E 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 L E 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 L E Lundbergfretagen, you can compare the effects of market volatilities on NAXS Nordic and L E 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 L E. Check out your portfolio center. Please also check ongoing floating volatility patterns of NAXS Nordic and L E.
Diversification Opportunities for NAXS Nordic and L E
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NAXS and LUND-B is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding NAXS Nordic Access and L E Lundbergfretagen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on L E Lundbergfretagen 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 L E. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of L E Lundbergfretagen has no effect on the direction of NAXS Nordic i.e., NAXS Nordic and L E go up and down completely randomly.
Pair Corralation between NAXS Nordic and L E
Assuming the 90 days trading horizon NAXS Nordic is expected to generate 11.9 times less return on investment than L E. In addition to that, NAXS Nordic is 1.26 times more volatile than L E Lundbergfretagen. It trades about 0.0 of its total potential returns per unit of risk. L E Lundbergfretagen is currently generating about 0.03 per unit of volatility. If you would invest 46,173 in L E Lundbergfretagen on September 4, 2024 and sell it today you would earn a total of 7,327 from holding L E Lundbergfretagen or generate 15.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
NAXS Nordic Access vs. L E Lundbergfretagen
Performance |
| Timeline |
| NAXS Nordic Access |
| L E Lundbergfretagen |
NAXS Nordic and L E Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NAXS Nordic and L E
The main advantage of trading using opposite NAXS Nordic and L E positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NAXS Nordic position performs unexpectedly, L E 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 L E will offset losses from the drop in L E'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 |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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