Correlation Between Ocean Sun and Nordhealth
Can any of the company-specific risk be diversified away by investing in both Ocean Sun and Nordhealth 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 Ocean Sun and Nordhealth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ocean Sun As and Nordhealth AS, you can compare the effects of market volatilities on Ocean Sun and Nordhealth 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 Ocean Sun with a short position of Nordhealth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ocean Sun and Nordhealth.
Diversification Opportunities for Ocean Sun and Nordhealth
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ocean and Nordhealth is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Ocean Sun As and Nordhealth AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordhealth AS and Ocean Sun 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 Ocean Sun As are associated (or correlated) with Nordhealth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordhealth AS has no effect on the direction of Ocean Sun i.e., Ocean Sun and Nordhealth go up and down completely randomly.
Pair Corralation between Ocean Sun and Nordhealth
Assuming the 90 days trading horizon Ocean Sun As is expected to under-perform the Nordhealth. But the stock apears to be less risky and, when comparing its historical volatility, Ocean Sun As is 1.02 times less risky than Nordhealth. The stock trades about -0.05 of its potential returns per unit of risk. The Nordhealth AS is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 3,740 in Nordhealth AS on September 14, 2024 and sell it today you would earn a total of 360.00 from holding Nordhealth AS or generate 9.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ocean Sun As vs. Nordhealth AS
Performance |
| Timeline |
| Ocean Sun As |
| Nordhealth AS |
Ocean Sun and Nordhealth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ocean Sun and Nordhealth
The main advantage of trading using opposite Ocean Sun and Nordhealth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ocean Sun position performs unexpectedly, Nordhealth 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 Nordhealth will offset losses from the drop in Nordhealth's long position.| Ocean Sun vs. Grieg Seafood ASA | Ocean Sun vs. Techstep ASA | Ocean Sun vs. Goodtech | Ocean Sun vs. 5Th Planet Games |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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