Correlation Between New Nordic and Acuvi AB
Can any of the company-specific risk be diversified away by investing in both New Nordic and Acuvi 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 New Nordic and Acuvi AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Nordic Healthbrands and Acuvi AB, you can compare the effects of market volatilities on New Nordic and Acuvi 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 New Nordic with a short position of Acuvi AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Nordic and Acuvi AB.
Diversification Opportunities for New Nordic and Acuvi AB
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between New and Acuvi is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding New Nordic Healthbrands and Acuvi AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acuvi AB and New Nordic 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 New Nordic Healthbrands are associated (or correlated) with Acuvi AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acuvi AB has no effect on the direction of New Nordic i.e., New Nordic and Acuvi AB go up and down completely randomly.
Pair Corralation between New Nordic and Acuvi AB
Assuming the 90 days trading horizon New Nordic Healthbrands is expected to generate 1.08 times more return on investment than Acuvi AB. However, New Nordic is 1.08 times more volatile than Acuvi AB. It trades about 0.06 of its potential returns per unit of risk. Acuvi AB is currently generating about 0.05 per unit of risk. If you would invest 1,470 in New Nordic Healthbrands on November 27, 2024 and sell it today you would earn a total of 90.00 from holding New Nordic Healthbrands or generate 6.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Nordic Healthbrands vs. Acuvi AB
Performance |
| Timeline |
| New Nordic Healthbrands |
| Acuvi AB |
New Nordic and Acuvi AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Nordic and Acuvi AB
The main advantage of trading using opposite New Nordic and Acuvi AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Nordic position performs unexpectedly, Acuvi 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 Acuvi AB will offset losses from the drop in Acuvi AB's long position.| New Nordic vs. Stille AB | New Nordic vs. Midsona AB | New Nordic vs. Precio Fishbone AB | New Nordic vs. C Rad AB |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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