Correlation Between Nidaros Sparebank and Nordic Aqua
Can any of the company-specific risk be diversified away by investing in both Nidaros Sparebank and Nordic Aqua 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 Nidaros Sparebank and Nordic Aqua into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nidaros Sparebank and Nordic Aqua Partners, you can compare the effects of market volatilities on Nidaros Sparebank and Nordic Aqua 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 Nidaros Sparebank with a short position of Nordic Aqua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nidaros Sparebank and Nordic Aqua.
Diversification Opportunities for Nidaros Sparebank and Nordic Aqua
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nidaros and Nordic is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Nidaros Sparebank and Nordic Aqua Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordic Aqua Partners and Nidaros Sparebank 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 Nidaros Sparebank are associated (or correlated) with Nordic Aqua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordic Aqua Partners has no effect on the direction of Nidaros Sparebank i.e., Nidaros Sparebank and Nordic Aqua go up and down completely randomly.
Pair Corralation between Nidaros Sparebank and Nordic Aqua
Assuming the 90 days trading horizon Nidaros Sparebank is expected to generate 0.25 times more return on investment than Nordic Aqua. However, Nidaros Sparebank is 3.96 times less risky than Nordic Aqua. It trades about -0.35 of its potential returns per unit of risk. Nordic Aqua Partners is currently generating about -0.13 per unit of risk. If you would invest 10,358 in Nidaros Sparebank on September 1, 2024 and sell it today you would lose (358.00) from holding Nidaros Sparebank or give up 3.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Nidaros Sparebank vs. Nordic Aqua Partners
Performance |
| Timeline |
| Nidaros Sparebank |
| Nordic Aqua Partners |
Nidaros Sparebank and Nordic Aqua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nidaros Sparebank and Nordic Aqua
The main advantage of trading using opposite Nidaros Sparebank and Nordic Aqua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nidaros Sparebank position performs unexpectedly, Nordic Aqua 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 Aqua will offset losses from the drop in Nordic Aqua's long position.| Nidaros Sparebank vs. Sparebank 1 SMN | Nidaros Sparebank vs. Sparebank 1 Nord Norge | Nidaros Sparebank vs. Sparebanken Vest | Nidaros Sparebank vs. Sparebank 1 Ostfold |
| Nordic Aqua vs. Andfjord Salmon AS | Nordic Aqua vs. Elkem ASA | Nordic Aqua vs. Integrated Wind Solutions | Nordic Aqua vs. Vow ASA |
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.
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