Correlation Between Nordic Technology and Proximar Seafood
Can any of the company-specific risk be diversified away by investing in both Nordic Technology and Proximar Seafood 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 Proximar Seafood 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 Proximar Seafood AS, you can compare the effects of market volatilities on Nordic Technology and Proximar Seafood 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 Proximar Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Technology and Proximar Seafood.
Diversification Opportunities for Nordic Technology and Proximar Seafood
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nordic and Proximar is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Technology Group and Proximar Seafood AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Proximar Seafood 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 Proximar Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Proximar Seafood has no effect on the direction of Nordic Technology i.e., Nordic Technology and Proximar Seafood go up and down completely randomly.
Pair Corralation between Nordic Technology and Proximar Seafood
Assuming the 90 days trading horizon Nordic Technology Group is expected to generate 0.85 times more return on investment than Proximar Seafood. However, Nordic Technology Group is 1.18 times less risky than Proximar Seafood. It trades about 0.17 of its potential returns per unit of risk. Proximar Seafood AS is currently generating about -0.08 per unit of risk. If you would invest 250.00 in Nordic Technology Group on August 29, 2024 and sell it today you would earn a total of 20.00 from holding Nordic Technology Group or generate 8.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordic Technology Group vs. Proximar Seafood AS
Performance |
| Timeline |
| Nordic Technology |
| Proximar Seafood |
Nordic Technology and Proximar Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Technology and Proximar Seafood
The main advantage of trading using opposite Nordic Technology and Proximar Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Technology position performs unexpectedly, Proximar Seafood 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 Proximar Seafood will offset losses from the drop in Proximar Seafood's long position.| Nordic Technology vs. Next Biometrics Group | Nordic Technology vs. Elkem ASA | Nordic Technology vs. Vow ASA | Nordic Technology vs. North Energy ASA |
| Proximar Seafood vs. Nidaros Sparebank | Proximar Seafood vs. Aasen Sparebank | Proximar Seafood vs. Pareto Bank ASA | Proximar Seafood vs. Gaming Innovation Group |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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