Correlation Between Norsk Hydro and USS
Can any of the company-specific risk be diversified away by investing in both Norsk Hydro and USS 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 USS 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 USS Co, you can compare the effects of market volatilities on Norsk Hydro and USS 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 USS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norsk Hydro and USS.
Diversification Opportunities for Norsk Hydro and USS
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Norsk and USS is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Norsk Hydro ASA and USS Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USS Co 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 USS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USS Co has no effect on the direction of Norsk Hydro i.e., Norsk Hydro and USS go up and down completely randomly.
Pair Corralation between Norsk Hydro and USS
Assuming the 90 days trading horizon Norsk Hydro ASA is expected to generate 2.7 times more return on investment than USS. However, Norsk Hydro is 2.7 times more volatile than USS Co. It trades about 0.07 of its potential returns per unit of risk. USS Co is currently generating about 0.01 per unit of risk. If you would invest 347.00 in Norsk Hydro ASA on September 3, 2024 and sell it today you would earn a total of 240.00 from holding Norsk Hydro ASA or generate 69.16% 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. USS Co
Performance |
| Timeline |
| Norsk Hydro ASA |
| USS Co |
Norsk Hydro and USS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norsk Hydro and USS
The main advantage of trading using opposite Norsk Hydro and USS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norsk Hydro position performs unexpectedly, USS 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 USS will offset losses from the drop in USS'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 |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |