Correlation Between Norsk Hydro and Chalice Mining
Can any of the company-specific risk be diversified away by investing in both Norsk Hydro and Chalice 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 Chalice 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 Chalice Mining Limited, you can compare the effects of market volatilities on Norsk Hydro and Chalice 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 Chalice Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norsk Hydro and Chalice Mining.
Diversification Opportunities for Norsk Hydro and Chalice Mining
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Norsk and Chalice is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Norsk Hydro ASA and Chalice Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chalice Mining 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 Chalice Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chalice Mining has no effect on the direction of Norsk Hydro i.e., Norsk Hydro and Chalice Mining go up and down completely randomly.
Pair Corralation between Norsk Hydro and Chalice Mining
Assuming the 90 days trading horizon Norsk Hydro ASA is expected to generate 0.68 times more return on investment than Chalice Mining. However, Norsk Hydro ASA is 1.47 times less risky than Chalice Mining. It trades about 0.03 of its potential returns per unit of risk. Chalice Mining Limited is currently generating about -0.05 per unit of risk. If you would invest 432.00 in Norsk Hydro ASA on September 19, 2024 and sell it today you would earn a total of 117.00 from holding Norsk Hydro ASA or generate 27.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Norsk Hydro ASA vs. Chalice Mining Limited
Performance |
| Timeline |
| Norsk Hydro ASA |
| Chalice Mining |
Norsk Hydro and Chalice Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norsk Hydro and Chalice Mining
The main advantage of trading using opposite Norsk Hydro and Chalice Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norsk Hydro position performs unexpectedly, Chalice 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 Chalice Mining will offset losses from the drop in Chalice Mining's long position.| Norsk Hydro vs. T MOBILE US | Norsk Hydro vs. PT Ace Hardware | Norsk Hydro vs. Align Technology | Norsk Hydro vs. SMA Solar Technology |
| Chalice Mining vs. Superior Plus Corp | Chalice Mining vs. SIVERS SEMICONDUCTORS AB | Chalice Mining vs. Norsk Hydro ASA | Chalice Mining 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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