Correlation Between Norsk Hydro and PTT OIL+RETBUS-FOR-B
Can any of the company-specific risk be diversified away by investing in both Norsk Hydro and PTT OIL+RETBUS-FOR-B 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 PTT OIL+RETBUS-FOR-B 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 PTT OILRETBUS FOR BA10, you can compare the effects of market volatilities on Norsk Hydro and PTT OIL+RETBUS-FOR-B 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 PTT OIL+RETBUS-FOR-B. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norsk Hydro and PTT OIL+RETBUS-FOR-B.
Diversification Opportunities for Norsk Hydro and PTT OIL+RETBUS-FOR-B
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Norsk and PTT is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Norsk Hydro ASA and PTT OILRETBUS FOR BA10 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PTT OIL+RETBUS-FOR-B 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 PTT OIL+RETBUS-FOR-B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PTT OIL+RETBUS-FOR-B has no effect on the direction of Norsk Hydro i.e., Norsk Hydro and PTT OIL+RETBUS-FOR-B go up and down completely randomly.
Pair Corralation between Norsk Hydro and PTT OIL+RETBUS-FOR-B
Assuming the 90 days trading horizon Norsk Hydro ASA is expected to under-perform the PTT OIL+RETBUS-FOR-B. But the stock apears to be less risky and, when comparing its historical volatility, Norsk Hydro ASA is 1.55 times less risky than PTT OIL+RETBUS-FOR-B. The stock trades about -0.59 of its potential returns per unit of risk. The PTT OILRETBUS FOR BA10 is currently generating about -0.33 of returns per unit of risk over similar time horizon. If you would invest 38.00 in PTT OILRETBUS FOR BA10 on September 22, 2024 and sell it today you would lose (5.00) from holding PTT OILRETBUS FOR BA10 or give up 13.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Norsk Hydro ASA vs. PTT OILRETBUS FOR BA10
Performance |
| Timeline |
| Norsk Hydro ASA |
| PTT OIL+RETBUS-FOR-B |
Norsk Hydro and PTT OIL+RETBUS-FOR-B Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norsk Hydro and PTT OIL+RETBUS-FOR-B
The main advantage of trading using opposite Norsk Hydro and PTT OIL+RETBUS-FOR-B positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norsk Hydro position performs unexpectedly, PTT OIL+RETBUS-FOR-B 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 PTT OIL+RETBUS-FOR-B will offset losses from the drop in PTT OIL+RETBUS-FOR-B's long position.| Norsk Hydro vs. Perseus Mining Limited | Norsk Hydro vs. Ryanair Holdings plc | Norsk Hydro vs. SEALED AIR | Norsk Hydro vs. Harmony Gold Mining |
| PTT OIL+RETBUS-FOR-B vs. Superior Plus Corp | PTT OIL+RETBUS-FOR-B vs. SIVERS SEMICONDUCTORS AB | PTT OIL+RETBUS-FOR-B vs. Norsk Hydro ASA | PTT OIL+RETBUS-FOR-B 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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