Correlation Between Norsk Hydro and MONGOLIAN MINING
Can any of the company-specific risk be diversified away by investing in both Norsk Hydro and MONGOLIAN MINING 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 Norsk Hydro and MONGOLIAN MINING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Norsk Hydro ASA and MONGOLIAN MINING CRPREGS, you can compare the effects of market volatilities on Norsk Hydro and MONGOLIAN MINING 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 Norsk Hydro with a short position of MONGOLIAN MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norsk Hydro and MONGOLIAN MINING.
Diversification Opportunities for Norsk Hydro and MONGOLIAN MINING
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Norsk and MONGOLIAN is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Norsk Hydro ASA and MONGOLIAN MINING CRPREGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MONGOLIAN MINING CRPREGS and Norsk Hydro 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 Norsk Hydro ASA are associated (or correlated) with MONGOLIAN MINING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MONGOLIAN MINING CRPREGS has no effect on the direction of Norsk Hydro i.e., Norsk Hydro and MONGOLIAN MINING go up and down completely randomly.
Pair Corralation between Norsk Hydro and MONGOLIAN MINING
Assuming the 90 days trading horizon Norsk Hydro ASA is expected to generate 1.4 times more return on investment than MONGOLIAN MINING. However, Norsk Hydro is 1.4 times more volatile than MONGOLIAN MINING CRPREGS. It trades about 0.07 of its potential returns per unit of risk. MONGOLIAN MINING CRPREGS is currently generating about -0.11 per unit of risk. If you would invest 552.00 in Norsk Hydro ASA on September 13, 2024 and sell it today you would earn a total of 20.00 from holding Norsk Hydro ASA or generate 3.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Norsk Hydro ASA vs. MONGOLIAN MINING CRPREGS
Performance |
| Timeline |
| Norsk Hydro ASA |
| MONGOLIAN MINING CRPREGS |
Norsk Hydro and MONGOLIAN MINING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norsk Hydro and MONGOLIAN MINING
The main advantage of trading using opposite Norsk Hydro and MONGOLIAN MINING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norsk Hydro position performs unexpectedly, MONGOLIAN MINING 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 MONGOLIAN MINING will offset losses from the drop in MONGOLIAN MINING's long position.| Norsk Hydro vs. Goosehead Insurance | Norsk Hydro vs. RETAIL FOOD GROUP | Norsk Hydro vs. COSTCO WHOLESALE CDR | Norsk Hydro vs. SBI Insurance Group |
| MONGOLIAN MINING vs. Calibre Mining Corp | MONGOLIAN MINING vs. Solstad Offshore ASA | MONGOLIAN MINING vs. THAI BEVERAGE | MONGOLIAN MINING vs. EIDESVIK OFFSHORE NK |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |