Correlation Between NRC Group and AF Gruppen
Can any of the company-specific risk be diversified away by investing in both NRC Group and AF Gruppen 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 NRC Group and AF Gruppen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NRC Group ASA and AF Gruppen ASA, you can compare the effects of market volatilities on NRC Group and AF Gruppen 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 NRC Group with a short position of AF Gruppen. Check out your portfolio center. Please also check ongoing floating volatility patterns of NRC Group and AF Gruppen.
Diversification Opportunities for NRC Group and AF Gruppen
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between NRC and AFG is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding NRC Group ASA and AF Gruppen ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AF Gruppen ASA and NRC 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 NRC Group ASA are associated (or correlated) with AF Gruppen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AF Gruppen ASA has no effect on the direction of NRC Group i.e., NRC Group and AF Gruppen go up and down completely randomly.
Pair Corralation between NRC Group and AF Gruppen
Assuming the 90 days trading horizon NRC Group is expected to generate 1.21 times less return on investment than AF Gruppen. In addition to that, NRC Group is 5.61 times more volatile than AF Gruppen ASA. It trades about 0.02 of its total potential returns per unit of risk. AF Gruppen ASA is currently generating about 0.11 per unit of volatility. If you would invest 12,740 in AF Gruppen ASA on August 29, 2024 and sell it today you would earn a total of 1,000.00 from holding AF Gruppen ASA or generate 7.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NRC Group ASA vs. AF Gruppen ASA
Performance |
| Timeline |
| NRC Group ASA |
| AF Gruppen ASA |
NRC Group and AF Gruppen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NRC Group and AF Gruppen
The main advantage of trading using opposite NRC Group and AF Gruppen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NRC Group position performs unexpectedly, AF Gruppen 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 AF Gruppen will offset losses from the drop in AF Gruppen's long position.The idea behind NRC Group ASA and AF Gruppen ASA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| AF Gruppen vs. Veidekke ASA | AF Gruppen vs. Gjensidige Forsikring ASA | AF Gruppen vs. Orkla ASA | AF Gruppen vs. Kongsberg Gruppen ASA |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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