Correlation Between North Media and Bactiquant
Can any of the company-specific risk be diversified away by investing in both North Media and Bactiquant 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 Media and Bactiquant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between North Media AS and Bactiquant AS, you can compare the effects of market volatilities on North Media and Bactiquant 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 Media with a short position of Bactiquant. Check out your portfolio center. Please also check ongoing floating volatility patterns of North Media and Bactiquant.
Diversification Opportunities for North Media and Bactiquant
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between North and Bactiquant is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding North Media AS and Bactiquant AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bactiquant AS and North Media 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 Media AS are associated (or correlated) with Bactiquant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bactiquant AS has no effect on the direction of North Media i.e., North Media and Bactiquant go up and down completely randomly.
Pair Corralation between North Media and Bactiquant
Assuming the 90 days trading horizon North Media AS is expected to generate 0.3 times more return on investment than Bactiquant. However, North Media AS is 3.35 times less risky than Bactiquant. It trades about -0.25 of its potential returns per unit of risk. Bactiquant AS is currently generating about -0.26 per unit of risk. If you would invest 5,480 in North Media AS on August 29, 2024 and sell it today you would lose (380.00) from holding North Media AS or give up 6.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
North Media AS vs. Bactiquant AS
Performance |
| Timeline |
| North Media AS |
| Bactiquant AS |
North Media and Bactiquant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with North Media and Bactiquant
The main advantage of trading using opposite North Media and Bactiquant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if North Media position performs unexpectedly, Bactiquant 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 Bactiquant will offset losses from the drop in Bactiquant's long position.| North Media vs. Matas AS | North Media vs. cBrain AS | North Media vs. Alm Brand | North Media vs. Netcompany Group AS |
| Bactiquant vs. Skjern Bank AS | Bactiquant vs. North Media AS | Bactiquant vs. Nordfyns Bank AS | Bactiquant vs. PARKEN Sport Entertainment |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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