Correlation Between NOTE AB and Arctic Blue
Can any of the company-specific risk be diversified away by investing in both NOTE AB and Arctic Blue 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 NOTE AB and Arctic Blue into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NOTE AB and Arctic Blue Beverages, you can compare the effects of market volatilities on NOTE AB and Arctic Blue 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 NOTE AB with a short position of Arctic Blue. Check out your portfolio center. Please also check ongoing floating volatility patterns of NOTE AB and Arctic Blue.
Diversification Opportunities for NOTE AB and Arctic Blue
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NOTE and Arctic is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding NOTE AB and Arctic Blue Beverages in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arctic Blue Beverages and NOTE AB 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 NOTE AB are associated (or correlated) with Arctic Blue. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arctic Blue Beverages has no effect on the direction of NOTE AB i.e., NOTE AB and Arctic Blue go up and down completely randomly.
Pair Corralation between NOTE AB and Arctic Blue
Assuming the 90 days trading horizon NOTE AB is expected to generate 0.39 times more return on investment than Arctic Blue. However, NOTE AB is 2.56 times less risky than Arctic Blue. It trades about -0.04 of its potential returns per unit of risk. Arctic Blue Beverages is currently generating about -0.02 per unit of risk. If you would invest 23,920 in NOTE AB on September 4, 2024 and sell it today you would lose (10,580) from holding NOTE AB or give up 44.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NOTE AB vs. Arctic Blue Beverages
Performance |
| Timeline |
| NOTE AB |
| Arctic Blue Beverages |
NOTE AB and Arctic Blue Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NOTE AB and Arctic Blue
The main advantage of trading using opposite NOTE AB and Arctic Blue positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NOTE AB position performs unexpectedly, Arctic Blue 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 Arctic Blue will offset losses from the drop in Arctic Blue's long position.| NOTE AB vs. Novotek AB | NOTE AB vs. Addnode Group AB | NOTE AB vs. Softronic AB | NOTE AB vs. CTT Systems AB |
| Arctic Blue vs. Nordea Bank Abp | Arctic Blue vs. Episurf Medical AB | Arctic Blue vs. Skandinaviska Enskilda Banken | Arctic Blue vs. Lundin Mining |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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