Correlation Between Norva24 Group and Ctek AB
Can any of the company-specific risk be diversified away by investing in both Norva24 Group and Ctek AB 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 Norva24 Group and Ctek AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Norva24 Group AB and Ctek AB, you can compare the effects of market volatilities on Norva24 Group and Ctek AB 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 Norva24 Group with a short position of Ctek AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norva24 Group and Ctek AB.
Diversification Opportunities for Norva24 Group and Ctek AB
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Norva24 and Ctek is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Norva24 Group AB and Ctek AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ctek AB and Norva24 Group 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 Norva24 Group AB are associated (or correlated) with Ctek AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ctek AB has no effect on the direction of Norva24 Group i.e., Norva24 Group and Ctek AB go up and down completely randomly.
Pair Corralation between Norva24 Group and Ctek AB
Assuming the 90 days trading horizon Norva24 Group AB is expected to generate 0.81 times more return on investment than Ctek AB. However, Norva24 Group AB is 1.24 times less risky than Ctek AB. It trades about 0.0 of its potential returns per unit of risk. Ctek AB is currently generating about -0.04 per unit of risk. If you would invest 3,070 in Norva24 Group AB on August 24, 2024 and sell it today you would lose (345.00) from holding Norva24 Group AB or give up 11.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Norva24 Group AB vs. Ctek AB
Performance |
| Timeline |
| Norva24 Group AB |
| Ctek AB |
Norva24 Group and Ctek AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norva24 Group and Ctek AB
The main advantage of trading using opposite Norva24 Group and Ctek AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norva24 Group position performs unexpectedly, Ctek AB 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 Ctek AB will offset losses from the drop in Ctek AB's long position.| Norva24 Group vs. Fasadgruppen Group AB | Norva24 Group vs. Green Landscaping Group | Norva24 Group vs. Volati AB | Norva24 Group vs. Instalco Intressenter AB |
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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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