Correlation Between Norsk Hydro and NEW PACIFIC
Can any of the company-specific risk be diversified away by investing in both Norsk Hydro and NEW PACIFIC 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 NEW PACIFIC 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 NEW PACIFIC METALS, you can compare the effects of market volatilities on Norsk Hydro and NEW PACIFIC 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 NEW PACIFIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norsk Hydro and NEW PACIFIC.
Diversification Opportunities for Norsk Hydro and NEW PACIFIC
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Norsk and NEW is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Norsk Hydro ASA and NEW PACIFIC METALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEW PACIFIC METALS 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 NEW PACIFIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEW PACIFIC METALS has no effect on the direction of Norsk Hydro i.e., Norsk Hydro and NEW PACIFIC go up and down completely randomly.
Pair Corralation between Norsk Hydro and NEW PACIFIC
Assuming the 90 days trading horizon Norsk Hydro ASA is expected to generate 1.04 times more return on investment than NEW PACIFIC. However, Norsk Hydro is 1.04 times more volatile than NEW PACIFIC METALS. It trades about 0.06 of its potential returns per unit of risk. NEW PACIFIC METALS is currently generating about 0.0 per unit of risk. If you would invest 345.00 in Norsk Hydro ASA on September 14, 2024 and sell it today you would earn a total of 221.00 from holding Norsk Hydro ASA or generate 64.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Norsk Hydro ASA vs. NEW PACIFIC METALS
Performance |
| Timeline |
| Norsk Hydro ASA |
| NEW PACIFIC METALS |
Norsk Hydro and NEW PACIFIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norsk Hydro and NEW PACIFIC
The main advantage of trading using opposite Norsk Hydro and NEW PACIFIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norsk Hydro position performs unexpectedly, NEW PACIFIC 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 NEW PACIFIC will offset losses from the drop in NEW PACIFIC's long position.| Norsk Hydro vs. Taylor Morrison Home | Norsk Hydro vs. American Homes 4 | Norsk Hydro vs. Haverty Furniture Companies | Norsk Hydro vs. Autohome ADR |
| NEW PACIFIC vs. Superior Plus Corp | NEW PACIFIC vs. SIVERS SEMICONDUCTORS AB | NEW PACIFIC vs. Norsk Hydro ASA | NEW PACIFIC vs. Reliance Steel Aluminum |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |