Correlation Between Nordic Technology and Green Minerals
Can any of the company-specific risk be diversified away by investing in both Nordic Technology and Green Minerals 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 Green Minerals 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 Green Minerals AS, you can compare the effects of market volatilities on Nordic Technology and Green Minerals 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 Green Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Technology and Green Minerals.
Diversification Opportunities for Nordic Technology and Green Minerals
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Nordic and Green is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Technology Group and Green Minerals AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Minerals AS 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 Green Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Minerals AS has no effect on the direction of Nordic Technology i.e., Nordic Technology and Green Minerals go up and down completely randomly.
Pair Corralation between Nordic Technology and Green Minerals
Assuming the 90 days trading horizon Nordic Technology Group is expected to under-perform the Green Minerals. But the stock apears to be less risky and, when comparing its historical volatility, Nordic Technology Group is 1.63 times less risky than Green Minerals. The stock trades about -0.02 of its potential returns per unit of risk. The Green Minerals AS is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 884.00 in Green Minerals AS on September 3, 2024 and sell it today you would lose (234.00) from holding Green Minerals AS or give up 26.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordic Technology Group vs. Green Minerals AS
Performance |
| Timeline |
| Nordic Technology |
| Green Minerals AS |
Nordic Technology and Green Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Technology and Green Minerals
The main advantage of trading using opposite Nordic Technology and Green Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Technology position performs unexpectedly, Green Minerals 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 Green Minerals will offset losses from the drop in Green Minerals' 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 |
| Green Minerals vs. Rana Gruber AS | Green Minerals vs. Romsdal Sparebank | Green Minerals vs. Elkem ASA | Green Minerals vs. Integrated Wind Solutions |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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