Correlation Between Nordic Iron and Mofast AB
Can any of the company-specific risk be diversified away by investing in both Nordic Iron and Mofast 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 Nordic Iron and Mofast AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nordic Iron Ore and Mofast AB, you can compare the effects of market volatilities on Nordic Iron and Mofast 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 Nordic Iron with a short position of Mofast AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Iron and Mofast AB.
Diversification Opportunities for Nordic Iron and Mofast AB
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nordic and Mofast is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Iron Ore and Mofast AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mofast AB and Nordic Iron 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 Nordic Iron Ore are associated (or correlated) with Mofast AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mofast AB has no effect on the direction of Nordic Iron i.e., Nordic Iron and Mofast AB go up and down completely randomly.
Pair Corralation between Nordic Iron and Mofast AB
Assuming the 90 days trading horizon Nordic Iron Ore is expected to under-perform the Mofast AB. But the stock apears to be less risky and, when comparing its historical volatility, Nordic Iron Ore is 1.1 times less risky than Mofast AB. The stock trades about -0.03 of its potential returns per unit of risk. The Mofast AB is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,240 in Mofast AB on September 5, 2024 and sell it today you would earn a total of 260.00 from holding Mofast AB or generate 20.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordic Iron Ore vs. Mofast AB
Performance |
| Timeline |
| Nordic Iron Ore |
| Mofast AB |
Nordic Iron and Mofast AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Iron and Mofast AB
The main advantage of trading using opposite Nordic Iron and Mofast AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Iron position performs unexpectedly, Mofast 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 Mofast AB will offset losses from the drop in Mofast AB's long position.| Nordic Iron vs. Leading Edge Materials | Nordic Iron vs. Alzinova AB | Nordic Iron vs. SaltX Technology Holding | Nordic Iron vs. KABE Group AB |
| Mofast AB vs. Nordic Iron Ore | Mofast AB vs. Upsales Technology AB | Mofast AB vs. SaltX Technology Holding | Mofast AB vs. Arctic Blue Beverages |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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