Correlation Between Nordic Mining and Nidaros Sparebank
Can any of the company-specific risk be diversified away by investing in both Nordic Mining and Nidaros 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 Nidaros 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 Nidaros Sparebank, you can compare the effects of market volatilities on Nordic Mining and Nidaros 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 Nidaros Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Mining and Nidaros Sparebank.
Diversification Opportunities for Nordic Mining and Nidaros Sparebank
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nordic and Nidaros is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Mining ASA and Nidaros Sparebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nidaros 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 Nidaros Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nidaros Sparebank has no effect on the direction of Nordic Mining i.e., Nordic Mining and Nidaros Sparebank go up and down completely randomly.
Pair Corralation between Nordic Mining and Nidaros Sparebank
Assuming the 90 days trading horizon Nordic Mining is expected to generate 2.54 times less return on investment than Nidaros Sparebank. In addition to that, Nordic Mining is 1.63 times more volatile than Nidaros Sparebank. It trades about 0.12 of its total potential returns per unit of risk. Nidaros Sparebank is currently generating about 0.51 per unit of volatility. If you would invest 10,002 in Nidaros Sparebank on December 1, 2024 and sell it today you would earn a total of 1,388 from holding Nidaros Sparebank or generate 13.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordic Mining ASA vs. Nidaros Sparebank
Performance |
| Timeline |
| Nordic Mining ASA |
| Nidaros Sparebank |
Nordic Mining and Nidaros Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Mining and Nidaros Sparebank
The main advantage of trading using opposite Nordic Mining and Nidaros Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Mining position performs unexpectedly, Nidaros 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 Nidaros Sparebank will offset losses from the drop in Nidaros Sparebank's long position.| Nordic Mining vs. Nidaros Sparebank | Nordic Mining vs. Sunndal Sparebank | Nordic Mining vs. Helgeland Sparebank | Nordic Mining vs. Proximar Seafood AS |
| Nidaros Sparebank vs. Sparebank 1 SMN | Nidaros Sparebank vs. Romsdal Sparebank | Nidaros Sparebank vs. Aasen Sparebank | Nidaros Sparebank vs. Norwegian Air Shuttle |
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 Positions Ratings module to 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.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |