Correlation Between Norsk Hydro and MongoDB
Can any of the company-specific risk be diversified away by investing in both Norsk Hydro and MongoDB 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 MongoDB 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 MongoDB, you can compare the effects of market volatilities on Norsk Hydro and MongoDB 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 MongoDB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norsk Hydro and MongoDB.
Diversification Opportunities for Norsk Hydro and MongoDB
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Norsk and MongoDB is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Norsk Hydro ASA and MongoDB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MongoDB 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 MongoDB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MongoDB has no effect on the direction of Norsk Hydro i.e., Norsk Hydro and MongoDB go up and down completely randomly.
Pair Corralation between Norsk Hydro and MongoDB
Assuming the 90 days trading horizon Norsk Hydro ASA is expected to under-perform the MongoDB. But the stock apears to be less risky and, when comparing its historical volatility, Norsk Hydro ASA is 1.61 times less risky than MongoDB. The stock trades about -0.02 of its potential returns per unit of risk. The MongoDB is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 26,490 in MongoDB on September 13, 2024 and sell it today you would earn a total of 1,960 from holding MongoDB or generate 7.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Norsk Hydro ASA vs. MongoDB
Performance |
| Timeline |
| Norsk Hydro ASA |
| MongoDB |
Norsk Hydro and MongoDB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norsk Hydro and MongoDB
The main advantage of trading using opposite Norsk Hydro and MongoDB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norsk Hydro position performs unexpectedly, MongoDB 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 MongoDB will offset losses from the drop in MongoDB'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 |
| MongoDB vs. Adyen NV | MongoDB vs. Superior Plus Corp | MongoDB vs. SIVERS SEMICONDUCTORS AB | MongoDB vs. Norsk Hydro ASA |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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