Correlation Between Norsk Hydro and ADRIATIC METALS
Can any of the company-specific risk be diversified away by investing in both Norsk Hydro and ADRIATIC METALS 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 ADRIATIC METALS 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 ADRIATIC METALS LS 013355, you can compare the effects of market volatilities on Norsk Hydro and ADRIATIC METALS 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 ADRIATIC METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norsk Hydro and ADRIATIC METALS.
Diversification Opportunities for Norsk Hydro and ADRIATIC METALS
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Norsk and ADRIATIC is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Norsk Hydro ASA and ADRIATIC METALS LS 013355 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADRIATIC METALS LS 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 ADRIATIC METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADRIATIC METALS LS has no effect on the direction of Norsk Hydro i.e., Norsk Hydro and ADRIATIC METALS go up and down completely randomly.
Pair Corralation between Norsk Hydro and ADRIATIC METALS
Assuming the 90 days trading horizon Norsk Hydro ASA is expected to under-perform the ADRIATIC METALS. But the stock apears to be less risky and, when comparing its historical volatility, Norsk Hydro ASA is 1.95 times less risky than ADRIATIC METALS. The stock trades about -0.33 of its potential returns per unit of risk. The ADRIATIC METALS LS 013355 is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 244.00 in ADRIATIC METALS LS 013355 on October 10, 2024 and sell it today you would lose (16.00) from holding ADRIATIC METALS LS 013355 or give up 6.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Norsk Hydro ASA vs. ADRIATIC METALS LS 013355
Performance |
| Timeline |
| Norsk Hydro ASA |
| ADRIATIC METALS LS |
Norsk Hydro and ADRIATIC METALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norsk Hydro and ADRIATIC METALS
The main advantage of trading using opposite Norsk Hydro and ADRIATIC METALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norsk Hydro position performs unexpectedly, ADRIATIC METALS 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 ADRIATIC METALS will offset losses from the drop in ADRIATIC METALS's long position.| Norsk Hydro vs. WT OFFSHORE | Norsk Hydro vs. YATRA ONLINE DL 0001 | Norsk Hydro vs. USWE SPORTS AB | Norsk Hydro vs. SPORTING |
| ADRIATIC METALS vs. Superior Plus Corp | ADRIATIC METALS vs. NMI Holdings | ADRIATIC METALS vs. SIVERS SEMICONDUCTORS AB | ADRIATIC METALS vs. Talanx AG |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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