Correlation Between Nordic Mining and Itera ASA
Can any of the company-specific risk be diversified away by investing in both Nordic Mining and Itera ASA 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 Itera ASA 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 Itera ASA, you can compare the effects of market volatilities on Nordic Mining and Itera ASA 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 Itera ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Mining and Itera ASA.
Diversification Opportunities for Nordic Mining and Itera ASA
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Nordic and Itera is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Mining ASA and Itera ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itera 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 Itera ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Itera ASA has no effect on the direction of Nordic Mining i.e., Nordic Mining and Itera ASA go up and down completely randomly.
Pair Corralation between Nordic Mining and Itera ASA
Assuming the 90 days trading horizon Nordic Mining ASA is expected to generate 1.43 times more return on investment than Itera ASA. However, Nordic Mining is 1.43 times more volatile than Itera ASA. It trades about 0.02 of its potential returns per unit of risk. Itera ASA is currently generating about -0.01 per unit of risk. If you would invest 2,488 in Nordic Mining ASA on September 3, 2024 and sell it today you would earn a total of 53.00 from holding Nordic Mining ASA or generate 2.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordic Mining ASA vs. Itera ASA
Performance |
| Timeline |
| Nordic Mining ASA |
| Itera ASA |
Nordic Mining and Itera ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Mining and Itera ASA
The main advantage of trading using opposite Nordic Mining and Itera ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Mining position performs unexpectedly, Itera ASA 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 Itera ASA will offset losses from the drop in Itera ASA's long position.| Nordic Mining vs. Elkem ASA | Nordic Mining vs. Integrated Wind Solutions | Nordic Mining vs. Vow ASA | Nordic Mining vs. North Energy ASA |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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