Correlation Between New Nordic and Inwido AB
Can any of the company-specific risk be diversified away by investing in both New Nordic and Inwido 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 Inwido 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 Inwido AB, you can compare the effects of market volatilities on New Nordic and Inwido 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 Inwido AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Nordic and Inwido AB.
Diversification Opportunities for New Nordic and Inwido AB
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between New and Inwido is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding New Nordic Healthbrands and Inwido AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inwido 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 Inwido AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inwido AB has no effect on the direction of New Nordic i.e., New Nordic and Inwido AB go up and down completely randomly.
Pair Corralation between New Nordic and Inwido AB
Assuming the 90 days trading horizon New Nordic Healthbrands is expected to under-perform the Inwido AB. In addition to that, New Nordic is 1.65 times more volatile than Inwido AB. It trades about -0.03 of its total potential returns per unit of risk. Inwido AB is currently generating about 0.07 per unit of volatility. If you would invest 10,953 in Inwido AB on October 31, 2024 and sell it today you would earn a total of 8,567 from holding Inwido AB or generate 78.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Nordic Healthbrands vs. Inwido AB
Performance |
| Timeline |
| New Nordic Healthbrands |
| Inwido AB |
New Nordic and Inwido AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Nordic and Inwido AB
The main advantage of trading using opposite New Nordic and Inwido AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Nordic position performs unexpectedly, Inwido 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 Inwido AB will offset losses from the drop in Inwido 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 |
| Inwido AB vs. Norion Bank | Inwido AB vs. Nexam Chemical Holding | Inwido AB vs. JLT Mobile Computers | Inwido AB vs. Media and Games |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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