Correlation Between North Media and ChemoMetec
Can any of the company-specific risk be diversified away by investing in both North Media and ChemoMetec 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 ChemoMetec 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 ChemoMetec AS, you can compare the effects of market volatilities on North Media and ChemoMetec 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 ChemoMetec. Check out your portfolio center. Please also check ongoing floating volatility patterns of North Media and ChemoMetec.
Diversification Opportunities for North Media and ChemoMetec
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between North and ChemoMetec is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding North Media AS and ChemoMetec AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ChemoMetec 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 ChemoMetec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ChemoMetec AS has no effect on the direction of North Media i.e., North Media and ChemoMetec go up and down completely randomly.
Pair Corralation between North Media and ChemoMetec
Assuming the 90 days trading horizon North Media is expected to generate 6.38 times less return on investment than ChemoMetec. But when comparing it to its historical volatility, North Media AS is 2.18 times less risky than ChemoMetec. It trades about 0.0 of its potential returns per unit of risk. ChemoMetec AS is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 67,000 in ChemoMetec AS on August 28, 2024 and sell it today you would lose (18,420) from holding ChemoMetec AS or give up 27.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
North Media AS vs. ChemoMetec AS
Performance |
| Timeline |
| North Media AS |
| ChemoMetec AS |
North Media and ChemoMetec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with North Media and ChemoMetec
The main advantage of trading using opposite North Media and ChemoMetec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if North Media position performs unexpectedly, ChemoMetec 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 ChemoMetec will offset losses from the drop in ChemoMetec's long position.| North Media vs. Matas AS | North Media vs. cBrain AS | North Media vs. Alm Brand | North Media vs. Netcompany Group AS |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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