Correlation Between Norsk Hydro and AutoStore Holdings
Can any of the company-specific risk be diversified away by investing in both Norsk Hydro and AutoStore Holdings 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 Norsk Hydro and AutoStore Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Norsk Hydro ASA and AutoStore Holdings, you can compare the effects of market volatilities on Norsk Hydro and AutoStore Holdings 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 Norsk Hydro with a short position of AutoStore Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norsk Hydro and AutoStore Holdings.
Diversification Opportunities for Norsk Hydro and AutoStore Holdings
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Norsk and AutoStore is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Norsk Hydro ASA and AutoStore Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AutoStore Holdings and Norsk Hydro 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 Norsk Hydro ASA are associated (or correlated) with AutoStore Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AutoStore Holdings has no effect on the direction of Norsk Hydro i.e., Norsk Hydro and AutoStore Holdings go up and down completely randomly.
Pair Corralation between Norsk Hydro and AutoStore Holdings
Assuming the 90 days trading horizon Norsk Hydro ASA is expected to generate 0.55 times more return on investment than AutoStore Holdings. However, Norsk Hydro ASA is 1.83 times less risky than AutoStore Holdings. It trades about 0.01 of its potential returns per unit of risk. AutoStore Holdings is currently generating about -0.02 per unit of risk. If you would invest 7,020 in Norsk Hydro ASA on November 2, 2024 and sell it today you would lose (244.00) from holding Norsk Hydro ASA or give up 3.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Norsk Hydro ASA vs. AutoStore Holdings
Performance |
| Timeline |
| Norsk Hydro ASA |
| AutoStore Holdings |
Norsk Hydro and AutoStore Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norsk Hydro and AutoStore Holdings
The main advantage of trading using opposite Norsk Hydro and AutoStore Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norsk Hydro position performs unexpectedly, AutoStore Holdings 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 AutoStore Holdings will offset losses from the drop in AutoStore Holdings' long position.| Norsk Hydro vs. Yara International ASA | Norsk Hydro vs. Equinor ASA | Norsk Hydro vs. Telenor ASA | Norsk Hydro vs. Orkla ASA |
| AutoStore Holdings vs. Nordic Semiconductor ASA | AutoStore Holdings vs. Aker BP ASA | AutoStore Holdings vs. SalMar ASA | AutoStore Holdings vs. Scatec Solar OL |
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.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |