Correlation Between NRC Group and Link Mobility
Can any of the company-specific risk be diversified away by investing in both NRC Group and Link Mobility 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 Link Mobility 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 Link Mobility Group, you can compare the effects of market volatilities on NRC Group and Link Mobility 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 Link Mobility. Check out your portfolio center. Please also check ongoing floating volatility patterns of NRC Group and Link Mobility.
Diversification Opportunities for NRC Group and Link Mobility
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NRC and Link is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding NRC Group ASA and Link Mobility Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Link Mobility Group 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 Link Mobility. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Link Mobility Group has no effect on the direction of NRC Group i.e., NRC Group and Link Mobility go up and down completely randomly.
Pair Corralation between NRC Group and Link Mobility
Assuming the 90 days trading horizon NRC Group ASA is expected to under-perform the Link Mobility. In addition to that, NRC Group is 2.38 times more volatile than Link Mobility Group. It trades about -0.07 of its total potential returns per unit of risk. Link Mobility Group is currently generating about 0.09 per unit of volatility. If you would invest 1,712 in Link Mobility Group on August 27, 2024 and sell it today you would earn a total of 658.00 from holding Link Mobility Group or generate 38.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NRC Group ASA vs. Link Mobility Group
Performance |
| Timeline |
| NRC Group ASA |
| Link Mobility Group |
NRC Group and Link Mobility Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NRC Group and Link Mobility
The main advantage of trading using opposite NRC Group and Link Mobility positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NRC Group position performs unexpectedly, Link Mobility 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 Link Mobility will offset losses from the drop in Link Mobility's long position.The idea behind NRC Group ASA and Link Mobility Group 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.| Link Mobility vs. Crayon Group Holding | Link Mobility vs. NRC Group ASA | Link Mobility vs. Pexip Holding ASA | Link Mobility vs. Europris 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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