Correlation Between Nordic Technology and Aurskog Sparebank
Can any of the company-specific risk be diversified away by investing in both Nordic Technology and Aurskog Sparebank 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 Nordic Technology and Aurskog Sparebank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nordic Technology Group and Aurskog Sparebank, you can compare the effects of market volatilities on Nordic Technology and Aurskog Sparebank 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 Nordic Technology with a short position of Aurskog Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Technology and Aurskog Sparebank.
Diversification Opportunities for Nordic Technology and Aurskog Sparebank
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nordic and Aurskog is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Technology Group and Aurskog Sparebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurskog Sparebank and Nordic Technology 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 Nordic Technology Group are associated (or correlated) with Aurskog Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurskog Sparebank has no effect on the direction of Nordic Technology i.e., Nordic Technology and Aurskog Sparebank go up and down completely randomly.
Pair Corralation between Nordic Technology and Aurskog Sparebank
Assuming the 90 days trading horizon Nordic Technology Group is expected to under-perform the Aurskog Sparebank. In addition to that, Nordic Technology is 6.26 times more volatile than Aurskog Sparebank. It trades about -0.01 of its total potential returns per unit of risk. Aurskog Sparebank is currently generating about 0.05 per unit of volatility. If you would invest 21,600 in Aurskog Sparebank on September 3, 2024 and sell it today you would earn a total of 1,700 from holding Aurskog Sparebank or generate 7.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordic Technology Group vs. Aurskog Sparebank
Performance |
| Timeline |
| Nordic Technology |
| Aurskog Sparebank |
Nordic Technology and Aurskog Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Technology and Aurskog Sparebank
The main advantage of trading using opposite Nordic Technology and Aurskog Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Technology position performs unexpectedly, Aurskog Sparebank 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 Aurskog Sparebank will offset losses from the drop in Aurskog Sparebank's long position.| Nordic Technology vs. Nordic Halibut AS | Nordic Technology vs. Nordic Semiconductor ASA | Nordic Technology vs. Nordic Mining ASA | Nordic Technology vs. Nordic Aqua Partners |
| Aurskog Sparebank vs. Melhus Sparebank | Aurskog Sparebank vs. Holand og Setskog | Aurskog Sparebank vs. Helgeland Sparebank | Aurskog Sparebank vs. Elkem 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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