Correlation Between North Energy and Salmon Evolution
Can any of the company-specific risk be diversified away by investing in both North Energy and Salmon Evolution 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 North Energy and Salmon Evolution into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between North Energy ASA and Salmon Evolution Holding, you can compare the effects of market volatilities on North Energy and Salmon Evolution 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 North Energy with a short position of Salmon Evolution. Check out your portfolio center. Please also check ongoing floating volatility patterns of North Energy and Salmon Evolution.
Diversification Opportunities for North Energy and Salmon Evolution
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between North and Salmon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding North Energy ASA and Salmon Evolution Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salmon Evolution Holding and North Energy 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 North Energy ASA are associated (or correlated) with Salmon Evolution. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salmon Evolution Holding has no effect on the direction of North Energy i.e., North Energy and Salmon Evolution go up and down completely randomly.
Pair Corralation between North Energy and Salmon Evolution
Assuming the 90 days trading horizon North Energy ASA is expected to generate 1.38 times more return on investment than Salmon Evolution. However, North Energy is 1.38 times more volatile than Salmon Evolution Holding. It trades about 0.06 of its potential returns per unit of risk. Salmon Evolution Holding is currently generating about -0.09 per unit of risk. If you would invest 239.00 in North Energy ASA on September 3, 2024 and sell it today you would earn a total of 37.00 from holding North Energy ASA or generate 15.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
North Energy ASA vs. Salmon Evolution Holding
Performance |
| Timeline |
| North Energy ASA |
| Salmon Evolution Holding |
North Energy and Salmon Evolution Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with North Energy and Salmon Evolution
The main advantage of trading using opposite North Energy and Salmon Evolution positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if North Energy position performs unexpectedly, Salmon Evolution 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 Salmon Evolution will offset losses from the drop in Salmon Evolution's long position.| North Energy vs. Nidaros Sparebank | North Energy vs. Lea Bank ASA | North Energy vs. Morrow Bank ASA | North Energy vs. Melhus Sparebank |
| Salmon Evolution vs. Sparebank 1 SMN | Salmon Evolution vs. Polaris Media | Salmon Evolution vs. Romsdal Sparebank | Salmon Evolution vs. Kraft Bank 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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