Correlation Between Nordic Aqua and Atlantic Sapphire
Can any of the company-specific risk be diversified away by investing in both Nordic Aqua and Atlantic Sapphire 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 Aqua and Atlantic Sapphire into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nordic Aqua Partners and Atlantic Sapphire As, you can compare the effects of market volatilities on Nordic Aqua and Atlantic Sapphire 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 Aqua with a short position of Atlantic Sapphire. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Aqua and Atlantic Sapphire.
Diversification Opportunities for Nordic Aqua and Atlantic Sapphire
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nordic and Atlantic is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Aqua Partners and Atlantic Sapphire As in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlantic Sapphire and Nordic Aqua 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 Aqua Partners are associated (or correlated) with Atlantic Sapphire. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlantic Sapphire has no effect on the direction of Nordic Aqua i.e., Nordic Aqua and Atlantic Sapphire go up and down completely randomly.
Pair Corralation between Nordic Aqua and Atlantic Sapphire
Assuming the 90 days trading horizon Nordic Aqua Partners is expected to generate 0.8 times more return on investment than Atlantic Sapphire. However, Nordic Aqua Partners is 1.25 times less risky than Atlantic Sapphire. It trades about -0.14 of its potential returns per unit of risk. Atlantic Sapphire As is currently generating about -0.24 per unit of risk. If you would invest 7,700 in Nordic Aqua Partners on August 29, 2024 and sell it today you would lose (450.00) from holding Nordic Aqua Partners or give up 5.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordic Aqua Partners vs. Atlantic Sapphire As
Performance |
| Timeline |
| Nordic Aqua Partners |
| Atlantic Sapphire |
Nordic Aqua and Atlantic Sapphire Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Aqua and Atlantic Sapphire
The main advantage of trading using opposite Nordic Aqua and Atlantic Sapphire positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Aqua position performs unexpectedly, Atlantic Sapphire 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 Atlantic Sapphire will offset losses from the drop in Atlantic Sapphire's long position.| Nordic Aqua vs. Nordic Semiconductor ASA | Nordic Aqua vs. Nidaros Sparebank | Nordic Aqua vs. Cloudberry Clean Energy | Nordic Aqua vs. Jaeren Sparebank |
| Atlantic Sapphire vs. Grieg Seafood ASA | Atlantic Sapphire vs. Mowi ASA | Atlantic Sapphire vs. SalMar ASA | Atlantic Sapphire vs. Pf Bakkafrost |
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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