Correlation Between Nordic Mining and Ocean Sun
Can any of the company-specific risk be diversified away by investing in both Nordic Mining and Ocean Sun 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 Ocean Sun 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 Ocean Sun As, you can compare the effects of market volatilities on Nordic Mining and Ocean Sun 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 Ocean Sun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Mining and Ocean Sun.
Diversification Opportunities for Nordic Mining and Ocean Sun
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nordic and Ocean is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Mining ASA and Ocean Sun As in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ocean Sun As 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 Ocean Sun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ocean Sun As has no effect on the direction of Nordic Mining i.e., Nordic Mining and Ocean Sun go up and down completely randomly.
Pair Corralation between Nordic Mining and Ocean Sun
Assuming the 90 days trading horizon Nordic Mining ASA is expected to generate 0.4 times more return on investment than Ocean Sun. However, Nordic Mining ASA is 2.52 times less risky than Ocean Sun. It trades about 0.05 of its potential returns per unit of risk. Ocean Sun As is currently generating about -0.04 per unit of risk. If you would invest 2,272 in Nordic Mining ASA on September 5, 2024 and sell it today you would earn a total of 237.00 from holding Nordic Mining ASA or generate 10.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordic Mining ASA vs. Ocean Sun As
Performance |
| Timeline |
| Nordic Mining ASA |
| Ocean Sun As |
Nordic Mining and Ocean Sun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Mining and Ocean Sun
The main advantage of trading using opposite Nordic Mining and Ocean Sun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Mining position performs unexpectedly, Ocean Sun 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 Ocean Sun will offset losses from the drop in Ocean Sun'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 |
| Ocean Sun vs. Aurskog Sparebank | Ocean Sun vs. Sea1 Offshore | Ocean Sun vs. Skue Sparebank | Ocean Sun vs. Lea Bank ASA |
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.
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