Correlation Between Nordic Mining and Austevoll Seafood
Can any of the company-specific risk be diversified away by investing in both Nordic Mining and Austevoll Seafood 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 Nordic Mining and Austevoll Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nordic Mining ASA and Austevoll Seafood ASA, you can compare the effects of market volatilities on Nordic Mining and Austevoll Seafood 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 Nordic Mining with a short position of Austevoll Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Mining and Austevoll Seafood.
Diversification Opportunities for Nordic Mining and Austevoll Seafood
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nordic and Austevoll is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Mining ASA and Austevoll Seafood ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Austevoll Seafood ASA and Nordic Mining 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 Nordic Mining ASA are associated (or correlated) with Austevoll Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Austevoll Seafood ASA has no effect on the direction of Nordic Mining i.e., Nordic Mining and Austevoll Seafood go up and down completely randomly.
Pair Corralation between Nordic Mining and Austevoll Seafood
Assuming the 90 days trading horizon Nordic Mining ASA is expected to under-perform the Austevoll Seafood. In addition to that, Nordic Mining is 1.85 times more volatile than Austevoll Seafood ASA. It trades about -0.33 of its total potential returns per unit of risk. Austevoll Seafood ASA is currently generating about 0.44 per unit of volatility. If you would invest 9,805 in Austevoll Seafood ASA on November 3, 2024 and sell it today you would earn a total of 1,255 from holding Austevoll Seafood ASA or generate 12.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordic Mining ASA vs. Austevoll Seafood ASA
Performance |
| Timeline |
| Nordic Mining ASA |
| Austevoll Seafood ASA |
Nordic Mining and Austevoll Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Mining and Austevoll Seafood
The main advantage of trading using opposite Nordic Mining and Austevoll Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Mining position performs unexpectedly, Austevoll Seafood 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 Austevoll Seafood will offset losses from the drop in Austevoll Seafood's long position.| Nordic Mining vs. 5Th Planet Games | Nordic Mining vs. Cloudberry Clean Energy | Nordic Mining vs. Aurskog Sparebank | Nordic Mining vs. Nordic Semiconductor ASA |
| Austevoll Seafood vs. Lery Seafood Group | Austevoll Seafood vs. Grieg Seafood ASA | Austevoll Seafood vs. SalMar ASA | Austevoll Seafood vs. Pf Bakkafrost |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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