Correlation Between Nordic Technology and Belships
Can any of the company-specific risk be diversified away by investing in both Nordic Technology and Belships 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 Belships 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 Belships, you can compare the effects of market volatilities on Nordic Technology and Belships 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 Belships. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Technology and Belships.
Diversification Opportunities for Nordic Technology and Belships
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nordic and Belships is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Technology Group and Belships in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Belships 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 Belships. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Belships has no effect on the direction of Nordic Technology i.e., Nordic Technology and Belships go up and down completely randomly.
Pair Corralation between Nordic Technology and Belships
Assuming the 90 days trading horizon Nordic Technology Group is expected to generate 2.83 times more return on investment than Belships. However, Nordic Technology is 2.83 times more volatile than Belships. It trades about -0.01 of its potential returns per unit of risk. Belships is currently generating about -0.04 per unit of risk. If you would invest 390.00 in Nordic Technology Group on September 3, 2024 and sell it today you would lose (120.00) from holding Nordic Technology Group or give up 30.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordic Technology Group vs. Belships
Performance |
| Timeline |
| Nordic Technology |
| Belships |
Nordic Technology and Belships Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Technology and Belships
The main advantage of trading using opposite Nordic Technology and Belships positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Technology position performs unexpectedly, Belships 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 Belships will offset losses from the drop in Belships' 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 |
| Belships vs. Goodtech | Belships vs. Nordic Technology Group | Belships vs. Napatech AS | Belships vs. Instabank 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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