Correlation Between Northgold and Nordnet AB
Can any of the company-specific risk be diversified away by investing in both Northgold and Nordnet AB 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 Northgold and Nordnet AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northgold AB and Nordnet AB, you can compare the effects of market volatilities on Northgold and Nordnet AB 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 Northgold with a short position of Nordnet AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northgold and Nordnet AB.
Diversification Opportunities for Northgold and Nordnet AB
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Northgold and Nordnet is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Northgold AB and Nordnet AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordnet AB and Northgold 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 Northgold AB are associated (or correlated) with Nordnet AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordnet AB has no effect on the direction of Northgold i.e., Northgold and Nordnet AB go up and down completely randomly.
Pair Corralation between Northgold and Nordnet AB
If you would invest 22,600 in Nordnet AB on November 2, 2024 and sell it today you would earn a total of 4,000 from holding Nordnet AB or generate 17.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Northgold AB vs. Nordnet AB
Performance |
| Timeline |
| Northgold AB |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Nordnet AB |
Northgold and Nordnet AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northgold and Nordnet AB
The main advantage of trading using opposite Northgold and Nordnet AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northgold position performs unexpectedly, Nordnet AB 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 Nordnet AB will offset losses from the drop in Nordnet AB's long position.The idea behind Northgold AB and Nordnet AB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Nordnet AB vs. Avanza Bank Holding | Nordnet AB vs. NIBE Industrier AB | Nordnet AB vs. Sinch AB | Nordnet AB vs. Axfood AB |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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