Correlation Between Nordic Mining and Polaris Media
Can any of the company-specific risk be diversified away by investing in both Nordic Mining and Polaris Media 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 Polaris Media 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 Polaris Media, you can compare the effects of market volatilities on Nordic Mining and Polaris Media 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 Polaris Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Mining and Polaris Media.
Diversification Opportunities for Nordic Mining and Polaris Media
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nordic and Polaris is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Mining ASA and Polaris Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polaris Media 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 Polaris Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polaris Media has no effect on the direction of Nordic Mining i.e., Nordic Mining and Polaris Media go up and down completely randomly.
Pair Corralation between Nordic Mining and Polaris Media
Assuming the 90 days trading horizon Nordic Mining ASA is expected to under-perform the Polaris Media. In addition to that, Nordic Mining is 1.01 times more volatile than Polaris Media. It trades about -0.33 of its total potential returns per unit of risk. Polaris Media is currently generating about -0.08 per unit of volatility. If you would invest 8,500 in Polaris Media on November 3, 2024 and sell it today you would lose (400.00) from holding Polaris Media or give up 4.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordic Mining ASA vs. Polaris Media
Performance |
| Timeline |
| Nordic Mining ASA |
| Polaris Media |
Nordic Mining and Polaris Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Mining and Polaris Media
The main advantage of trading using opposite Nordic Mining and Polaris Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Mining position performs unexpectedly, Polaris Media 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 Polaris Media will offset losses from the drop in Polaris Media's long position.| Nordic Mining vs. 5Th Planet Games | Nordic Mining vs. Cloudberry Clean Energy | Nordic Mining vs. Aurskog Sparebank | Nordic Mining vs. Nordic Semiconductor ASA |
| Polaris Media vs. Kid ASA | Polaris Media vs. Byggma | Polaris Media vs. American Shipping | Polaris Media vs. Kitron 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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