Correlation Between Nordic Waterproofing and Arctic Blue
Can any of the company-specific risk be diversified away by investing in both Nordic Waterproofing and Arctic Blue 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 Waterproofing and Arctic Blue into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nordic Waterproofing Holding and Arctic Blue Beverages, you can compare the effects of market volatilities on Nordic Waterproofing and Arctic Blue 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 Waterproofing with a short position of Arctic Blue. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Waterproofing and Arctic Blue.
Diversification Opportunities for Nordic Waterproofing and Arctic Blue
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nordic and Arctic is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Waterproofing Holding and Arctic Blue Beverages in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arctic Blue Beverages and Nordic Waterproofing 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 Waterproofing Holding are associated (or correlated) with Arctic Blue. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arctic Blue Beverages has no effect on the direction of Nordic Waterproofing i.e., Nordic Waterproofing and Arctic Blue go up and down completely randomly.
Pair Corralation between Nordic Waterproofing and Arctic Blue
Assuming the 90 days trading horizon Nordic Waterproofing Holding is expected to generate 0.79 times more return on investment than Arctic Blue. However, Nordic Waterproofing Holding is 1.26 times less risky than Arctic Blue. It trades about 0.14 of its potential returns per unit of risk. Arctic Blue Beverages is currently generating about -0.5 per unit of risk. If you would invest 15,980 in Nordic Waterproofing Holding on August 30, 2024 and sell it today you would earn a total of 1,260 from holding Nordic Waterproofing Holding or generate 7.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordic Waterproofing Holding vs. Arctic Blue Beverages
Performance |
| Timeline |
| Nordic Waterproofing |
| Arctic Blue Beverages |
Nordic Waterproofing and Arctic Blue Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Waterproofing and Arctic Blue
The main advantage of trading using opposite Nordic Waterproofing and Arctic Blue positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Waterproofing position performs unexpectedly, Arctic Blue 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 Arctic Blue will offset losses from the drop in Arctic Blue's long position.| Nordic Waterproofing vs. Hexagon AB | Nordic Waterproofing vs. Investor AB ser | Nordic Waterproofing vs. Investment AB Latour | Nordic Waterproofing vs. ASSA ABLOY AB |
| Arctic Blue vs. Cint Group AB | Arctic Blue vs. Nordic Waterproofing Holding | Arctic Blue vs. RVRC Holding AB | Arctic Blue vs. Inwido AB |
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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