Correlation Between Norsk Hydro and OPEN HOUSE
Can any of the company-specific risk be diversified away by investing in both Norsk Hydro and OPEN HOUSE 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 OPEN HOUSE 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 OPEN HOUSE GROUP, you can compare the effects of market volatilities on Norsk Hydro and OPEN HOUSE 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 OPEN HOUSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norsk Hydro and OPEN HOUSE.
Diversification Opportunities for Norsk Hydro and OPEN HOUSE
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Norsk and OPEN is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Norsk Hydro ASA and OPEN HOUSE GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OPEN HOUSE GROUP 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 OPEN HOUSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OPEN HOUSE GROUP has no effect on the direction of Norsk Hydro i.e., Norsk Hydro and OPEN HOUSE go up and down completely randomly.
Pair Corralation between Norsk Hydro and OPEN HOUSE
Assuming the 90 days trading horizon Norsk Hydro is expected to generate 1.7 times less return on investment than OPEN HOUSE. In addition to that, Norsk Hydro is 1.64 times more volatile than OPEN HOUSE GROUP. It trades about 0.03 of its total potential returns per unit of risk. OPEN HOUSE GROUP is currently generating about 0.09 per unit of volatility. If you would invest 3,360 in OPEN HOUSE GROUP on September 3, 2024 and sell it today you would earn a total of 120.00 from holding OPEN HOUSE GROUP or generate 3.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Norsk Hydro ASA vs. OPEN HOUSE GROUP
Performance |
| Timeline |
| Norsk Hydro ASA |
| OPEN HOUSE GROUP |
Norsk Hydro and OPEN HOUSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norsk Hydro and OPEN HOUSE
The main advantage of trading using opposite Norsk Hydro and OPEN HOUSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norsk Hydro position performs unexpectedly, OPEN HOUSE 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 OPEN HOUSE will offset losses from the drop in OPEN HOUSE's long position.| Norsk Hydro vs. Apollo Medical Holdings | Norsk Hydro vs. Summit Hotel Properties | Norsk Hydro vs. Park Hotels Resorts | Norsk Hydro vs. MEDICAL FACILITIES NEW |
| OPEN HOUSE vs. ADRIATIC METALS LS 013355 | OPEN HOUSE vs. MAVEN WIRELESS SWEDEN | OPEN HOUSE vs. Chunghwa Telecom Co | OPEN HOUSE vs. Gamma Communications plc |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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