Correlation Between Nidaros Sparebank and PCI Biotech
Can any of the company-specific risk be diversified away by investing in both Nidaros Sparebank and PCI Biotech 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 PCI Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nidaros Sparebank and PCI Biotech Holding, you can compare the effects of market volatilities on Nidaros Sparebank and PCI Biotech 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 PCI Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nidaros Sparebank and PCI Biotech.
Diversification Opportunities for Nidaros Sparebank and PCI Biotech
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nidaros and PCI is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Nidaros Sparebank and PCI Biotech Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PCI Biotech Holding 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 PCI Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PCI Biotech Holding has no effect on the direction of Nidaros Sparebank i.e., Nidaros Sparebank and PCI Biotech go up and down completely randomly.
Pair Corralation between Nidaros Sparebank and PCI Biotech
Assuming the 90 days trading horizon Nidaros Sparebank is expected to generate 52.53 times less return on investment than PCI Biotech. But when comparing it to its historical volatility, Nidaros Sparebank is 17.87 times less risky than PCI Biotech. It trades about 0.01 of its potential returns per unit of risk. PCI Biotech Holding is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 141.00 in PCI Biotech Holding on September 12, 2024 and sell it today you would lose (1.00) from holding PCI Biotech Holding or give up 0.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nidaros Sparebank vs. PCI Biotech Holding
Performance |
| Timeline |
| Nidaros Sparebank |
| PCI Biotech Holding |
Nidaros Sparebank and PCI Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nidaros Sparebank and PCI Biotech
The main advantage of trading using opposite Nidaros Sparebank and PCI Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nidaros Sparebank position performs unexpectedly, PCI Biotech 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 PCI Biotech will offset losses from the drop in PCI Biotech's long position.| Nidaros Sparebank vs. DnB ASA | Nidaros Sparebank vs. Sparebank 1 SMN | Nidaros Sparebank vs. Sparebanken Mre | Nidaros Sparebank vs. Sparebank 1 Ostfold |
| PCI Biotech vs. Pyrum Innovations AG | PCI Biotech vs. Aker ASA | PCI Biotech vs. Pf Bakkafrost | PCI Biotech vs. SalMar 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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