Correlation Between Nordic Iron and Polygiene
Can any of the company-specific risk be diversified away by investing in both Nordic Iron and Polygiene 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 Polygiene 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 Polygiene AB, you can compare the effects of market volatilities on Nordic Iron and Polygiene 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 Polygiene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Iron and Polygiene.
Diversification Opportunities for Nordic Iron and Polygiene
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nordic and Polygiene is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Iron Ore and Polygiene AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polygiene 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 Polygiene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polygiene AB has no effect on the direction of Nordic Iron i.e., Nordic Iron and Polygiene go up and down completely randomly.
Pair Corralation between Nordic Iron and Polygiene
Assuming the 90 days trading horizon Nordic Iron is expected to generate 57.88 times less return on investment than Polygiene. But when comparing it to its historical volatility, Nordic Iron Ore is 1.05 times less risky than Polygiene. It trades about 0.0 of its potential returns per unit of risk. Polygiene AB is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 540.00 in Polygiene AB on January 18, 2025 and sell it today you would earn a total of 446.00 from holding Polygiene AB or generate 82.59% 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. Polygiene AB
Performance |
| Timeline |
| Nordic Iron Ore |
| Polygiene AB |
Nordic Iron and Polygiene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Iron and Polygiene
The main advantage of trading using opposite Nordic Iron and Polygiene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Iron position performs unexpectedly, Polygiene 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 Polygiene will offset losses from the drop in Polygiene's long position.| Nordic Iron vs. Leading Edge Materials | Nordic Iron vs. Alzinova AB | Nordic Iron vs. SaltX Technology Holding |
| Polygiene vs. G5 Entertainment publ | Polygiene vs. Nexam Chemical Holding | Polygiene vs. Swedencare publ AB | Polygiene vs. Genovis 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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