Correlation Between Nordic Iron and AB Sagax
Can any of the company-specific risk be diversified away by investing in both Nordic Iron and AB Sagax 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 AB Sagax 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 AB Sagax, you can compare the effects of market volatilities on Nordic Iron and AB Sagax 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 AB Sagax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Iron and AB Sagax.
Diversification Opportunities for Nordic Iron and AB Sagax
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nordic and SAGA-A is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Iron Ore and AB Sagax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AB Sagax 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 AB Sagax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AB Sagax has no effect on the direction of Nordic Iron i.e., Nordic Iron and AB Sagax go up and down completely randomly.
Pair Corralation between Nordic Iron and AB Sagax
Assuming the 90 days trading horizon Nordic Iron Ore is expected to generate 1.55 times more return on investment than AB Sagax. However, Nordic Iron is 1.55 times more volatile than AB Sagax. It trades about 0.05 of its potential returns per unit of risk. AB Sagax is currently generating about -0.1 per unit of risk. If you would invest 486.00 in Nordic Iron Ore on September 1, 2024 and sell it today you would earn a total of 14.00 from holding Nordic Iron Ore or generate 2.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordic Iron Ore vs. AB Sagax
Performance |
| Timeline |
| Nordic Iron Ore |
| AB Sagax |
Nordic Iron and AB Sagax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Iron and AB Sagax
The main advantage of trading using opposite Nordic Iron and AB Sagax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Iron position performs unexpectedly, AB Sagax 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 AB Sagax will offset losses from the drop in AB Sagax'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 |
| AB Sagax vs. USWE Sports AB | AB Sagax vs. Nordic Iron Ore | AB Sagax vs. Catena Media plc | AB Sagax vs. Beowulf Mining PLC |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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