Correlation Between North Media and Stenocare
Can any of the company-specific risk be diversified away by investing in both North Media and Stenocare 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 Stenocare 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 Stenocare AS, you can compare the effects of market volatilities on North Media and Stenocare 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 Stenocare. Check out your portfolio center. Please also check ongoing floating volatility patterns of North Media and Stenocare.
Diversification Opportunities for North Media and Stenocare
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between North and Stenocare is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding North Media AS and Stenocare AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stenocare 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 Stenocare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stenocare AS has no effect on the direction of North Media i.e., North Media and Stenocare go up and down completely randomly.
Pair Corralation between North Media and Stenocare
Assuming the 90 days trading horizon North Media AS is expected to generate 0.16 times more return on investment than Stenocare. However, North Media AS is 6.43 times less risky than Stenocare. It trades about 0.13 of its potential returns per unit of risk. Stenocare AS is currently generating about -0.03 per unit of risk. If you would invest 4,690 in North Media AS on October 24, 2024 and sell it today you would earn a total of 260.00 from holding North Media AS or generate 5.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
North Media AS vs. Stenocare AS
Performance |
| Timeline |
| North Media AS |
| Stenocare AS |
North Media and Stenocare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with North Media and Stenocare
The main advantage of trading using opposite North Media and Stenocare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if North Media position performs unexpectedly, Stenocare 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 Stenocare will offset losses from the drop in Stenocare's long position.| North Media vs. Matas AS | North Media vs. cBrain AS | North Media vs. Alm Brand | North Media vs. Netcompany Group AS |
| Stenocare vs. Fynske Bank AS | Stenocare vs. PARKEN Sport Entertainment | Stenocare vs. Laan Spar Bank | Stenocare vs. North Media 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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