Correlation Between Nordic Mining and Jaeren Sparebank
Can any of the company-specific risk be diversified away by investing in both Nordic Mining and Jaeren Sparebank 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 Jaeren Sparebank 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 Jaeren Sparebank, you can compare the effects of market volatilities on Nordic Mining and Jaeren Sparebank 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 Jaeren Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Mining and Jaeren Sparebank.
Diversification Opportunities for Nordic Mining and Jaeren Sparebank
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nordic and Jaeren is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Mining ASA and Jaeren Sparebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jaeren Sparebank 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 Jaeren Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jaeren Sparebank has no effect on the direction of Nordic Mining i.e., Nordic Mining and Jaeren Sparebank go up and down completely randomly.
Pair Corralation between Nordic Mining and Jaeren Sparebank
Assuming the 90 days trading horizon Nordic Mining ASA is expected to under-perform the Jaeren Sparebank. In addition to that, Nordic Mining is 1.84 times more volatile than Jaeren Sparebank. It trades about -0.22 of its total potential returns per unit of risk. Jaeren Sparebank is currently generating about 0.19 per unit of volatility. If you would invest 31,500 in Jaeren Sparebank on October 26, 2024 and sell it today you would earn a total of 2,700 from holding Jaeren Sparebank or generate 8.57% 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. Jaeren Sparebank
Performance |
| Timeline |
| Nordic Mining ASA |
| Jaeren Sparebank |
Nordic Mining and Jaeren Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Mining and Jaeren Sparebank
The main advantage of trading using opposite Nordic Mining and Jaeren Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Mining position performs unexpectedly, Jaeren Sparebank 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 Jaeren Sparebank will offset losses from the drop in Jaeren Sparebank's long position.| Nordic Mining vs. Proximar Seafood AS | Nordic Mining vs. Polaris Media | Nordic Mining vs. Odfjell Technology | Nordic Mining vs. Romsdal Sparebank |
| Jaeren Sparebank vs. DnB ASA | Jaeren Sparebank vs. Sparebank 1 SMN | Jaeren Sparebank vs. Sparebanken Mre | Jaeren Sparebank vs. Sparebank 1 Ostfold |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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