Correlation Between Odfjell Technology and Nidaros Sparebank
Can any of the company-specific risk be diversified away by investing in both Odfjell Technology and Nidaros Sparebank 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 Odfjell Technology and Nidaros Sparebank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Odfjell Technology and Nidaros Sparebank, you can compare the effects of market volatilities on Odfjell Technology and Nidaros Sparebank 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 Odfjell Technology with a short position of Nidaros Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Odfjell Technology and Nidaros Sparebank.
Diversification Opportunities for Odfjell Technology and Nidaros Sparebank
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Odfjell and Nidaros is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Odfjell Technology and Nidaros Sparebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nidaros Sparebank and Odfjell 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 Odfjell Technology are associated (or correlated) with Nidaros Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nidaros Sparebank has no effect on the direction of Odfjell Technology i.e., Odfjell Technology and Nidaros Sparebank go up and down completely randomly.
Pair Corralation between Odfjell Technology and Nidaros Sparebank
Assuming the 90 days trading horizon Odfjell Technology is expected to under-perform the Nidaros Sparebank. In addition to that, Odfjell Technology is 6.21 times more volatile than Nidaros Sparebank. It trades about -0.09 of its total potential returns per unit of risk. Nidaros Sparebank is currently generating about -0.36 per unit of volatility. If you would invest 10,358 in Nidaros Sparebank on August 28, 2024 and sell it today you would lose (358.00) from holding Nidaros Sparebank or give up 3.46% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Odfjell Technology vs. Nidaros Sparebank
Performance |
Timeline |
Odfjell Technology |
Nidaros Sparebank |
Odfjell Technology and Nidaros Sparebank Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Odfjell Technology and Nidaros Sparebank
The main advantage of trading using opposite Odfjell Technology and Nidaros Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Odfjell Technology position performs unexpectedly, Nidaros Sparebank 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 Nidaros Sparebank will offset losses from the drop in Nidaros Sparebank's long position.Odfjell Technology vs. BW Offshore | Odfjell Technology vs. Elkem ASA | Odfjell Technology vs. Solstad Offsho | Odfjell Technology vs. Arcticzymes Technologies ASA |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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