Correlation Between Nordic Technology and Vow ASA
Can any of the company-specific risk be diversified away by investing in both Nordic Technology and Vow 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 Vow 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 Vow ASA, you can compare the effects of market volatilities on Nordic Technology and Vow 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 Vow ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Technology and Vow ASA.
Diversification Opportunities for Nordic Technology and Vow ASA
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Nordic and Vow is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Technology Group and Vow ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vow 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 Vow ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vow ASA has no effect on the direction of Nordic Technology i.e., Nordic Technology and Vow ASA go up and down completely randomly.
Pair Corralation between Nordic Technology and Vow ASA
Assuming the 90 days trading horizon Nordic Technology Group is expected to generate 0.32 times more return on investment than Vow ASA. However, Nordic Technology Group is 3.17 times less risky than Vow ASA. It trades about -0.15 of its potential returns per unit of risk. Vow ASA is currently generating about -0.13 per unit of risk. If you would invest 358.00 in Nordic Technology Group on September 2, 2024 and sell it today you would lose (88.00) from holding Nordic Technology Group or give up 24.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordic Technology Group vs. Vow ASA
Performance |
| Timeline |
| Nordic Technology |
| Vow ASA |
Nordic Technology and Vow ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Technology and Vow ASA
The main advantage of trading using opposite Nordic Technology and Vow ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Technology position performs unexpectedly, Vow 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 Vow ASA will offset losses from the drop in Vow ASA's long position.| Nordic Technology vs. Next Biometrics Group | Nordic Technology vs. Elkem ASA | Nordic Technology vs. Integrated Wind Solutions | Nordic Technology vs. Vow ASA |
| Vow ASA vs. Aker Horizons AS | Vow ASA vs. Aker Solutions ASA | Vow ASA vs. REC Silicon ASA | Vow ASA 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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