Correlation Between Nordisk Bergteknik and AstraZeneca PLC
Can any of the company-specific risk be diversified away by investing in both Nordisk Bergteknik and AstraZeneca PLC 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 Nordisk Bergteknik and AstraZeneca PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nordisk Bergteknik AB and AstraZeneca PLC, you can compare the effects of market volatilities on Nordisk Bergteknik and AstraZeneca PLC 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 Nordisk Bergteknik with a short position of AstraZeneca PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordisk Bergteknik and AstraZeneca PLC.
Diversification Opportunities for Nordisk Bergteknik and AstraZeneca PLC
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nordisk and AstraZeneca is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Nordisk Bergteknik AB and AstraZeneca PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AstraZeneca PLC and Nordisk Bergteknik 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 Nordisk Bergteknik AB are associated (or correlated) with AstraZeneca PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AstraZeneca PLC has no effect on the direction of Nordisk Bergteknik i.e., Nordisk Bergteknik and AstraZeneca PLC go up and down completely randomly.
Pair Corralation between Nordisk Bergteknik and AstraZeneca PLC
Assuming the 90 days trading horizon Nordisk Bergteknik AB is expected to under-perform the AstraZeneca PLC. But the stock apears to be less risky and, when comparing its historical volatility, Nordisk Bergteknik AB is 1.23 times less risky than AstraZeneca PLC. The stock trades about -0.53 of its potential returns per unit of risk. The AstraZeneca PLC is currently generating about -0.19 of returns per unit of risk over similar time horizon. If you would invest 160,600 in AstraZeneca PLC on August 28, 2024 and sell it today you would lose (15,200) from holding AstraZeneca PLC or give up 9.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordisk Bergteknik AB vs. AstraZeneca PLC
Performance |
| Timeline |
| Nordisk Bergteknik |
| AstraZeneca PLC |
Nordisk Bergteknik and AstraZeneca PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordisk Bergteknik and AstraZeneca PLC
The main advantage of trading using opposite Nordisk Bergteknik and AstraZeneca PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordisk Bergteknik position performs unexpectedly, AstraZeneca PLC 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 AstraZeneca PLC will offset losses from the drop in AstraZeneca PLC's long position.| Nordisk Bergteknik vs. Ctek AB | Nordisk Bergteknik vs. NCAB Group | Nordisk Bergteknik vs. Bufab Holding AB | Nordisk Bergteknik vs. Profoto Holding AB |
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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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