Correlation Between Nordic Mining and Odfjell Technology
Can any of the company-specific risk be diversified away by investing in both Nordic Mining and Odfjell Technology 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 Odfjell Technology 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 Odfjell Technology, you can compare the effects of market volatilities on Nordic Mining and Odfjell Technology 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 Odfjell Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Mining and Odfjell Technology.
Diversification Opportunities for Nordic Mining and Odfjell Technology
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nordic and Odfjell is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Mining ASA and Odfjell Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Odfjell Technology 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 Odfjell Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Odfjell Technology has no effect on the direction of Nordic Mining i.e., Nordic Mining and Odfjell Technology go up and down completely randomly.
Pair Corralation between Nordic Mining and Odfjell Technology
Assuming the 90 days trading horizon Nordic Mining is expected to generate 2.04 times less return on investment than Odfjell Technology. In addition to that, Nordic Mining is 1.24 times more volatile than Odfjell Technology. It trades about 0.02 of its total potential returns per unit of risk. Odfjell Technology is currently generating about 0.06 per unit of volatility. If you would invest 2,598 in Odfjell Technology on August 24, 2024 and sell it today you would earn a total of 2,117 from holding Odfjell Technology or generate 81.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordic Mining ASA vs. Odfjell Technology
Performance |
| Timeline |
| Nordic Mining ASA |
| Odfjell Technology |
Nordic Mining and Odfjell Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Mining and Odfjell Technology
The main advantage of trading using opposite Nordic Mining and Odfjell Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Mining position performs unexpectedly, Odfjell Technology 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 Odfjell Technology will offset losses from the drop in Odfjell Technology's long position.| Nordic Mining vs. Elkem ASA | Nordic Mining vs. Vow ASA | Nordic Mining vs. North Energy ASA | Nordic Mining vs. Arcticzymes Technologies ASA |
| Odfjell Technology vs. Shelf Drilling | Odfjell Technology vs. BW Offshore | Odfjell Technology vs. Elkem ASA | Odfjell Technology vs. Solstad Offsho |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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