Correlation Between Norma Group and Motorcar Parts
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By analyzing existing cross correlation between Norma Group AG and Motorcar Parts of, you can compare the effects of market volatilities on Norma Group and Motorcar Parts 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 Norma Group with a short position of Motorcar Parts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norma Group and Motorcar Parts.
Diversification Opportunities for Norma Group and Motorcar Parts
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Norma and Motorcar is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Norma Group AG and Motorcar Parts of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Motorcar Parts and Norma Group 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 Norma Group AG are associated (or correlated) with Motorcar Parts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Motorcar Parts has no effect on the direction of Norma Group i.e., Norma Group and Motorcar Parts go up and down completely randomly.
Pair Corralation between Norma Group and Motorcar Parts
Assuming the 90 days trading horizon Norma Group is expected to generate 2.57 times less return on investment than Motorcar Parts. But when comparing it to its historical volatility, Norma Group AG is 2.0 times less risky than Motorcar Parts. It trades about 0.0 of its potential returns per unit of risk. Motorcar Parts of is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 855.00 in Motorcar Parts of on September 4, 2024 and sell it today you would lose (125.00) from holding Motorcar Parts of or give up 14.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Norma Group AG vs. Motorcar Parts of
Performance |
| Timeline |
| Norma Group AG |
| Motorcar Parts |
Norma Group and Motorcar Parts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norma Group and Motorcar Parts
The main advantage of trading using opposite Norma Group and Motorcar Parts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norma Group position performs unexpectedly, Motorcar Parts 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 Motorcar Parts will offset losses from the drop in Motorcar Parts' long position.| Norma Group vs. Motorcar Parts of | Norma Group vs. SPORTING | Norma Group vs. Grupo Carso SAB | Norma Group vs. CARSALESCOM |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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