Correlation Between Norsk Hydro and Going Public
Can any of the company-specific risk be diversified away by investing in both Norsk Hydro and Going Public 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 Going Public 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 Going Public Media, you can compare the effects of market volatilities on Norsk Hydro and Going Public 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 Going Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norsk Hydro and Going Public.
Diversification Opportunities for Norsk Hydro and Going Public
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Norsk and Going is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Norsk Hydro ASA and Going Public Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Going Public Media 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 Going Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Going Public Media has no effect on the direction of Norsk Hydro i.e., Norsk Hydro and Going Public go up and down completely randomly.
Pair Corralation between Norsk Hydro and Going Public
Assuming the 90 days trading horizon Norsk Hydro ASA is expected to generate 1.24 times more return on investment than Going Public. However, Norsk Hydro is 1.24 times more volatile than Going Public Media. It trades about 0.06 of its potential returns per unit of risk. Going Public Media is currently generating about -0.28 per unit of risk. If you would invest 549.00 in Norsk Hydro ASA on September 15, 2024 and sell it today you would earn a total of 17.00 from holding Norsk Hydro ASA or generate 3.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Norsk Hydro ASA vs. Going Public Media
Performance |
| Timeline |
| Norsk Hydro ASA |
| Going Public Media |
Norsk Hydro and Going Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norsk Hydro and Going Public
The main advantage of trading using opposite Norsk Hydro and Going Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norsk Hydro position performs unexpectedly, Going Public 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 Going Public will offset losses from the drop in Going Public's long position.| Norsk Hydro vs. GALENA MINING LTD | Norsk Hydro vs. Cogent Communications Holdings | Norsk Hydro vs. GREENX METALS LTD | Norsk Hydro vs. T MOBILE US |
| Going Public vs. Superior Plus Corp | Going Public vs. SIVERS SEMICONDUCTORS AB | Going Public vs. Norsk Hydro ASA | Going Public 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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