Correlation Between Norra Metals and Fortescue Metals
Can any of the company-specific risk be diversified away by investing in both Norra Metals and Fortescue Metals 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 Norra Metals and Fortescue Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Norra Metals Corp and Fortescue Metals Group, you can compare the effects of market volatilities on Norra Metals and Fortescue Metals 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 Norra Metals with a short position of Fortescue Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norra Metals and Fortescue Metals.
Diversification Opportunities for Norra Metals and Fortescue Metals
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Norra and Fortescue is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Norra Metals Corp and Fortescue Metals Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortescue Metals and Norra Metals 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 Norra Metals Corp are associated (or correlated) with Fortescue Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortescue Metals has no effect on the direction of Norra Metals i.e., Norra Metals and Fortescue Metals go up and down completely randomly.
Pair Corralation between Norra Metals and Fortescue Metals
Assuming the 90 days horizon Norra Metals Corp is expected to generate 32.28 times more return on investment than Fortescue Metals. However, Norra Metals is 32.28 times more volatile than Fortescue Metals Group. It trades about 0.07 of its potential returns per unit of risk. Fortescue Metals Group is currently generating about 0.01 per unit of risk. If you would invest 1.70 in Norra Metals Corp on August 29, 2024 and sell it today you would lose (0.70) from holding Norra Metals Corp or give up 41.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Norra Metals Corp vs. Fortescue Metals Group
Performance |
| Timeline |
| Norra Metals Corp |
| Fortescue Metals |
Norra Metals and Fortescue Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norra Metals and Fortescue Metals
The main advantage of trading using opposite Norra Metals and Fortescue Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norra Metals position performs unexpectedly, Fortescue Metals 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 Fortescue Metals will offset losses from the drop in Fortescue Metals' long position.| Norra Metals vs. Mattel Inc | Norra Metals vs. Brunswick | Norra Metals vs. WEC Energy Group | Norra Metals vs. Emerson Radio |
| Fortescue Metals vs. IGO Limited | Fortescue Metals vs. Qubec Nickel Corp | Fortescue Metals vs. IGO Limited | Fortescue Metals vs. Hannan Metals |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |