Correlation Between Nordic Mining and TietoEVRY Oyj
Can any of the company-specific risk be diversified away by investing in both Nordic Mining and TietoEVRY Oyj 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 TietoEVRY Oyj 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 TietoEVRY Oyj, you can compare the effects of market volatilities on Nordic Mining and TietoEVRY Oyj 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 TietoEVRY Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Mining and TietoEVRY Oyj.
Diversification Opportunities for Nordic Mining and TietoEVRY Oyj
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Nordic and TietoEVRY is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Mining ASA and TietoEVRY Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TietoEVRY Oyj 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 TietoEVRY Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TietoEVRY Oyj has no effect on the direction of Nordic Mining i.e., Nordic Mining and TietoEVRY Oyj go up and down completely randomly.
Pair Corralation between Nordic Mining and TietoEVRY Oyj
Assuming the 90 days trading horizon Nordic Mining ASA is expected to under-perform the TietoEVRY Oyj. In addition to that, Nordic Mining is 1.97 times more volatile than TietoEVRY Oyj. It trades about -0.29 of its total potential returns per unit of risk. TietoEVRY Oyj is currently generating about 0.15 per unit of volatility. If you would invest 19,630 in TietoEVRY Oyj on October 20, 2024 and sell it today you would earn a total of 730.00 from holding TietoEVRY Oyj or generate 3.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordic Mining ASA vs. TietoEVRY Oyj
Performance |
| Timeline |
| Nordic Mining ASA |
| TietoEVRY Oyj |
Nordic Mining and TietoEVRY Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Mining and TietoEVRY Oyj
The main advantage of trading using opposite Nordic Mining and TietoEVRY Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Mining position performs unexpectedly, TietoEVRY Oyj 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 TietoEVRY Oyj will offset losses from the drop in TietoEVRY Oyj's long position.| Nordic Mining vs. Bien Sparebank ASA | Nordic Mining vs. Eidesvik Offshore ASA | Nordic Mining vs. Nidaros Sparebank | Nordic Mining vs. Sparebanken Ost |
| TietoEVRY Oyj vs. NorAm Drilling AS | TietoEVRY Oyj vs. SD Standard Drilling | TietoEVRY Oyj vs. Grong Sparebank | TietoEVRY Oyj vs. Nordic Mining 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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