Correlation Between North Media and HH International
Can any of the company-specific risk be diversified away by investing in both North Media and HH International 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 HH International 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 HH International AS, you can compare the effects of market volatilities on North Media and HH International 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 HH International. Check out your portfolio center. Please also check ongoing floating volatility patterns of North Media and HH International.
Diversification Opportunities for North Media and HH International
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between North and HH International is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding North Media AS and HH International AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HH International 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 HH International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HH International has no effect on the direction of North Media i.e., North Media and HH International go up and down completely randomly.
Pair Corralation between North Media and HH International
Assuming the 90 days trading horizon North Media AS is expected to generate 1.38 times more return on investment than HH International. However, North Media is 1.38 times more volatile than HH International AS. It trades about 0.03 of its potential returns per unit of risk. HH International AS is currently generating about -0.15 per unit of risk. If you would invest 4,860 in North Media AS on November 1, 2024 and sell it today you would earn a total of 50.00 from holding North Media AS or generate 1.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
North Media AS vs. HH International AS
Performance |
| Timeline |
| North Media AS |
| HH International |
North Media and HH International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with North Media and HH International
The main advantage of trading using opposite North Media and HH International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if North Media position performs unexpectedly, HH International 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 HH International will offset losses from the drop in HH International's long position.| North Media vs. Matas AS | North Media vs. cBrain AS | North Media vs. Alm Brand | North Media vs. Netcompany Group AS |
| HH International vs. ROCKWOOL International AS | HH International vs. Per Aarsleff Holding | HH International vs. Matas AS | HH International vs. DFDS 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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