Correlation Between Nordisk Bergteknik and Netel Holding
Can any of the company-specific risk be diversified away by investing in both Nordisk Bergteknik and Netel Holding 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 Netel Holding 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 Netel Holding AB, you can compare the effects of market volatilities on Nordisk Bergteknik and Netel Holding 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 Netel Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordisk Bergteknik and Netel Holding.
Diversification Opportunities for Nordisk Bergteknik and Netel Holding
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Nordisk and Netel is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Nordisk Bergteknik AB and Netel Holding AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Netel Holding AB 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 Netel Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Netel Holding AB has no effect on the direction of Nordisk Bergteknik i.e., Nordisk Bergteknik and Netel Holding go up and down completely randomly.
Pair Corralation between Nordisk Bergteknik and Netel Holding
Assuming the 90 days trading horizon Nordisk Bergteknik AB is expected to under-perform the Netel Holding. But the stock apears to be less risky and, when comparing its historical volatility, Nordisk Bergteknik AB is 1.19 times less risky than Netel Holding. The stock trades about -0.05 of its potential returns per unit of risk. The Netel Holding AB is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,375 in Netel Holding AB on August 31, 2024 and sell it today you would lose (81.00) from holding Netel Holding AB or give up 5.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordisk Bergteknik AB vs. Netel Holding AB
Performance |
| Timeline |
| Nordisk Bergteknik |
| Netel Holding AB |
Nordisk Bergteknik and Netel Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordisk Bergteknik and Netel Holding
The main advantage of trading using opposite Nordisk Bergteknik and Netel Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordisk Bergteknik position performs unexpectedly, Netel Holding 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 Netel Holding will offset losses from the drop in Netel Holding'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 |
| Netel Holding vs. NCAB Group | Netel Holding vs. Nordisk Bergteknik AB | Netel Holding vs. Ctek AB | Netel Holding vs. Nordic Waterproofing Holding |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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