Correlation Between Nordic Mining and Sunndal Sparebank
Can any of the company-specific risk be diversified away by investing in both Nordic Mining and Sunndal 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 Sunndal 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 Sunndal Sparebank, you can compare the effects of market volatilities on Nordic Mining and Sunndal 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 Sunndal Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Mining and Sunndal Sparebank.
Diversification Opportunities for Nordic Mining and Sunndal Sparebank
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Nordic and Sunndal is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Mining ASA and Sunndal Sparebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunndal 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 Sunndal Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunndal Sparebank has no effect on the direction of Nordic Mining i.e., Nordic Mining and Sunndal Sparebank go up and down completely randomly.
Pair Corralation between Nordic Mining and Sunndal Sparebank
Assuming the 90 days trading horizon Nordic Mining ASA is expected to generate 2.87 times more return on investment than Sunndal Sparebank. However, Nordic Mining is 2.87 times more volatile than Sunndal Sparebank. It trades about 0.01 of its potential returns per unit of risk. Sunndal Sparebank is currently generating about 0.02 per unit of risk. If you would invest 2,661 in Nordic Mining ASA on November 2, 2024 and sell it today you would lose (461.00) from holding Nordic Mining ASA or give up 17.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordic Mining ASA vs. Sunndal Sparebank
Performance |
| Timeline |
| Nordic Mining ASA |
| Sunndal Sparebank |
Nordic Mining and Sunndal Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Mining and Sunndal Sparebank
The main advantage of trading using opposite Nordic Mining and Sunndal Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Mining position performs unexpectedly, Sunndal 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 Sunndal Sparebank will offset losses from the drop in Sunndal Sparebank's long position.| Nordic Mining vs. Polaris Media | Nordic Mining vs. Cloudberry Clean Energy | Nordic Mining vs. Napatech AS | Nordic Mining vs. BW Offshore |
| Sunndal Sparebank vs. Odfjell Technology | Sunndal Sparebank vs. Nordic Semiconductor ASA | Sunndal Sparebank vs. Eidesvik Offshore ASA | Sunndal Sparebank vs. Sparebanken Ost |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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