Correlation Between Nordic Technology and Itera ASA
Can any of the company-specific risk be diversified away by investing in both Nordic Technology and Itera ASA 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 Itera ASA 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 Itera ASA, you can compare the effects of market volatilities on Nordic Technology and Itera ASA 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 Itera ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Technology and Itera ASA.
Diversification Opportunities for Nordic Technology and Itera ASA
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nordic and Itera is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Technology Group and Itera ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itera ASA 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 Itera ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Itera ASA has no effect on the direction of Nordic Technology i.e., Nordic Technology and Itera ASA go up and down completely randomly.
Pair Corralation between Nordic Technology and Itera ASA
Assuming the 90 days trading horizon Nordic Technology Group is expected to generate 7.59 times more return on investment than Itera ASA. However, Nordic Technology is 7.59 times more volatile than Itera ASA. It trades about 0.03 of its potential returns per unit of risk. Itera ASA is currently generating about -0.02 per unit of risk. If you would invest 190.00 in Nordic Technology Group on November 30, 2024 and sell it today you would lose (40.00) from holding Nordic Technology Group or give up 21.05% 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. Itera ASA
Performance |
| Timeline |
| Nordic Technology |
| Itera ASA |
Nordic Technology and Itera ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Technology and Itera ASA
The main advantage of trading using opposite Nordic Technology and Itera ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Technology position performs unexpectedly, Itera ASA 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 Itera ASA will offset losses from the drop in Itera ASA's long position.| Nordic Technology vs. Nordic Mining ASA | Nordic Technology vs. Morrow Bank ASA | Nordic Technology vs. Xplora Technologies As | Nordic Technology vs. Norwegian Air Shuttle |
| Itera ASA vs. Xplora Technologies As | Itera ASA vs. Odfjell Technology | Itera ASA vs. Instabank ASA | Itera ASA vs. Jaeren Sparebank |
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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