Correlation Between Nordic Mining and Waste Plastic
Can any of the company-specific risk be diversified away by investing in both Nordic Mining and Waste Plastic 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 Waste Plastic 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 Waste Plastic Upcycling, you can compare the effects of market volatilities on Nordic Mining and Waste Plastic 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 Waste Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Mining and Waste Plastic.
Diversification Opportunities for Nordic Mining and Waste Plastic
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nordic and Waste is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Mining ASA and Waste Plastic Upcycling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waste Plastic Upcycling 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 Waste Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waste Plastic Upcycling has no effect on the direction of Nordic Mining i.e., Nordic Mining and Waste Plastic go up and down completely randomly.
Pair Corralation between Nordic Mining and Waste Plastic
Assuming the 90 days trading horizon Nordic Mining ASA is expected to generate 4.87 times more return on investment than Waste Plastic. However, Nordic Mining is 4.87 times more volatile than Waste Plastic Upcycling. It trades about 0.19 of its potential returns per unit of risk. Waste Plastic Upcycling is currently generating about -0.07 per unit of risk. If you would invest 2,116 in Nordic Mining ASA on November 28, 2024 and sell it today you would earn a total of 194.00 from holding Nordic Mining ASA or generate 9.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Nordic Mining ASA vs. Waste Plastic Upcycling
Performance |
| Timeline |
| Nordic Mining ASA |
| Waste Plastic Upcycling |
Nordic Mining and Waste Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Mining and Waste Plastic
The main advantage of trading using opposite Nordic Mining and Waste Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Mining position performs unexpectedly, Waste Plastic 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 Waste Plastic will offset losses from the drop in Waste Plastic's long position.| Nordic Mining vs. Skue Sparebank | Nordic Mining vs. BW Offshore | Nordic Mining vs. Morrow Bank ASA | Nordic Mining vs. Odfjell Drilling |
| Waste Plastic vs. Instabank ASA | Waste Plastic vs. Aasen Sparebank | Waste Plastic vs. Romsdal Sparebank | Waste Plastic vs. Bien Sparebank 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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