Correlation Between Nordhealth and Grong Sparebank
Can any of the company-specific risk be diversified away by investing in both Nordhealth and Grong Sparebank 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 Grong Sparebank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nordhealth AS and Grong Sparebank, you can compare the effects of market volatilities on Nordhealth and Grong Sparebank 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 Grong Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordhealth and Grong Sparebank.
Diversification Opportunities for Nordhealth and Grong Sparebank
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Nordhealth and Grong is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Nordhealth AS and Grong Sparebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grong Sparebank 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 Grong Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grong Sparebank has no effect on the direction of Nordhealth i.e., Nordhealth and Grong Sparebank go up and down completely randomly.
Pair Corralation between Nordhealth and Grong Sparebank
Assuming the 90 days trading horizon Nordhealth AS is expected to generate 3.62 times more return on investment than Grong Sparebank. However, Nordhealth is 3.62 times more volatile than Grong Sparebank. It trades about 0.09 of its potential returns per unit of risk. Grong Sparebank is currently generating about 0.04 per unit of risk. If you would invest 3,780 in Nordhealth AS on August 29, 2024 and sell it today you would earn a total of 520.00 from holding Nordhealth AS or generate 13.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordhealth AS vs. Grong Sparebank
Performance |
| Timeline |
| Nordhealth AS |
| Grong Sparebank |
Nordhealth and Grong Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordhealth and Grong Sparebank
The main advantage of trading using opposite Nordhealth and Grong Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordhealth position performs unexpectedly, Grong Sparebank 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 Grong Sparebank will offset losses from the drop in Grong Sparebank's long position.| Nordhealth vs. Carasent ASA | Nordhealth vs. Elkem ASA | Nordhealth vs. DNB NOR KAPFORV | Nordhealth vs. Integrated Wind Solutions |
| Grong Sparebank vs. DnB ASA | Grong Sparebank vs. Sparebank 1 SR | Grong Sparebank vs. Sparebank 1 SMN | Grong Sparebank vs. Sparebanken Mre |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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