Correlation Between Nordhealth and Alternus Energy
Can any of the company-specific risk be diversified away by investing in both Nordhealth and Alternus Energy 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 Nordhealth and Alternus Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nordhealth AS and Alternus Energy Group, you can compare the effects of market volatilities on Nordhealth and Alternus Energy 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 Nordhealth with a short position of Alternus Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordhealth and Alternus Energy.
Diversification Opportunities for Nordhealth and Alternus Energy
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nordhealth and Alternus is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Nordhealth AS and Alternus Energy Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alternus Energy Group and Nordhealth 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 Nordhealth AS are associated (or correlated) with Alternus Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alternus Energy Group has no effect on the direction of Nordhealth i.e., Nordhealth and Alternus Energy go up and down completely randomly.
Pair Corralation between Nordhealth and Alternus Energy
Assuming the 90 days trading horizon Nordhealth AS is expected to generate 0.32 times more return on investment than Alternus Energy. However, Nordhealth AS is 3.14 times less risky than Alternus Energy. It trades about 0.11 of its potential returns per unit of risk. Alternus Energy Group is currently generating about 0.02 per unit of risk. If you would invest 3,700 in Nordhealth AS on September 15, 2024 and sell it today you would earn a total of 400.00 from holding Nordhealth AS or generate 10.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Nordhealth AS vs. Alternus Energy Group
Performance |
| Timeline |
| Nordhealth AS |
| Alternus Energy Group |
Nordhealth and Alternus Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordhealth and Alternus Energy
The main advantage of trading using opposite Nordhealth and Alternus Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordhealth position performs unexpectedly, Alternus Energy 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 Alternus Energy will offset losses from the drop in Alternus Energy's long position.The idea behind Nordhealth AS and Alternus Energy Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Alternus Energy vs. Aker Horizons AS | Alternus Energy vs. REC Silicon ASA | Alternus Energy vs. Vow ASA | Alternus Energy vs. Saga Pure 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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