Correlation Between North Media and Investin Optimal
Can any of the company-specific risk be diversified away by investing in both North Media and Investin Optimal 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 Investin Optimal 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 Investin Optimal Stabil, you can compare the effects of market volatilities on North Media and Investin Optimal 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 Investin Optimal. Check out your portfolio center. Please also check ongoing floating volatility patterns of North Media and Investin Optimal.
Diversification Opportunities for North Media and Investin Optimal
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between North and Investin is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding North Media AS and Investin Optimal Stabil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investin Optimal Stabil 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 Investin Optimal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investin Optimal Stabil has no effect on the direction of North Media i.e., North Media and Investin Optimal go up and down completely randomly.
Pair Corralation between North Media and Investin Optimal
Assuming the 90 days trading horizon North Media AS is expected to under-perform the Investin Optimal. In addition to that, North Media is 7.47 times more volatile than Investin Optimal Stabil. It trades about -0.02 of its total potential returns per unit of risk. Investin Optimal Stabil is currently generating about 0.13 per unit of volatility. If you would invest 12,719 in Investin Optimal Stabil on October 13, 2024 and sell it today you would earn a total of 2,110 from holding Investin Optimal Stabil or generate 16.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
North Media AS vs. Investin Optimal Stabil
Performance |
| Timeline |
| North Media AS |
| Investin Optimal Stabil |
North Media and Investin Optimal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with North Media and Investin Optimal
The main advantage of trading using opposite North Media and Investin Optimal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if North Media position performs unexpectedly, Investin Optimal 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 Investin Optimal will offset losses from the drop in Investin Optimal's long position.| North Media vs. Matas AS | North Media vs. cBrain AS | North Media vs. Alm Brand | North Media vs. Netcompany Group AS |
| Investin Optimal vs. Danske Andelskassers Bank | Investin Optimal vs. Fynske Bank AS | Investin Optimal vs. Dataproces Group AS | Investin Optimal vs. Lollands Bank |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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