Correlation Between Norsk Hydro and Nordic Unmanned
Can any of the company-specific risk be diversified away by investing in both Norsk Hydro and Nordic Unmanned 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 Nordic Unmanned 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 Nordic Unmanned As, you can compare the effects of market volatilities on Norsk Hydro and Nordic Unmanned 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 Nordic Unmanned. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norsk Hydro and Nordic Unmanned.
Diversification Opportunities for Norsk Hydro and Nordic Unmanned
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Norsk and Nordic is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Norsk Hydro ASA and Nordic Unmanned As in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordic Unmanned As 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 Nordic Unmanned. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordic Unmanned As has no effect on the direction of Norsk Hydro i.e., Norsk Hydro and Nordic Unmanned go up and down completely randomly.
Pair Corralation between Norsk Hydro and Nordic Unmanned
Assuming the 90 days trading horizon Norsk Hydro ASA is expected to generate 0.11 times more return on investment than Nordic Unmanned. However, Norsk Hydro ASA is 9.07 times less risky than Nordic Unmanned. It trades about 0.08 of its potential returns per unit of risk. Nordic Unmanned As is currently generating about -0.17 per unit of risk. If you would invest 6,844 in Norsk Hydro ASA on August 29, 2024 and sell it today you would earn a total of 274.00 from holding Norsk Hydro ASA or generate 4.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Norsk Hydro ASA vs. Nordic Unmanned As
Performance |
| Timeline |
| Norsk Hydro ASA |
| Nordic Unmanned As |
Norsk Hydro and Nordic Unmanned Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norsk Hydro and Nordic Unmanned
The main advantage of trading using opposite Norsk Hydro and Nordic Unmanned positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norsk Hydro position performs unexpectedly, Nordic Unmanned 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 Nordic Unmanned will offset losses from the drop in Nordic Unmanned's long position.| Norsk Hydro vs. Goodtech | Norsk Hydro vs. Havila Shipping ASA | Norsk Hydro vs. Eidesvik Offshore ASA | Norsk Hydro vs. Byggma |
| Nordic Unmanned vs. Skue Sparebank | Nordic Unmanned vs. Sparebanken Ost | Nordic Unmanned vs. Napatech AS | Nordic Unmanned vs. Norwegian Air Shuttle |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |