Correlation Between Odfjell Technology and Nordic Mining
Can any of the company-specific risk be diversified away by investing in both Odfjell Technology and Nordic Mining 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 Nordic Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Odfjell Technology and Nordic Mining ASA, you can compare the effects of market volatilities on Odfjell Technology and Nordic Mining 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 Nordic Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Odfjell Technology and Nordic Mining.
Diversification Opportunities for Odfjell Technology and Nordic Mining
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Odfjell and Nordic is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Odfjell Technology and Nordic Mining ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordic Mining ASA 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 Nordic Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordic Mining ASA has no effect on the direction of Odfjell Technology i.e., Odfjell Technology and Nordic Mining go up and down completely randomly.
Pair Corralation between Odfjell Technology and Nordic Mining
Assuming the 90 days trading horizon Odfjell Technology is expected to generate 0.97 times more return on investment than Nordic Mining. However, Odfjell Technology is 1.03 times less risky than Nordic Mining. It trades about 0.16 of its potential returns per unit of risk. Nordic Mining ASA is currently generating about -0.32 per unit of risk. If you would invest 4,400 in Odfjell Technology on October 21, 2024 and sell it today you would earn a total of 320.00 from holding Odfjell Technology or generate 7.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Odfjell Technology vs. Nordic Mining ASA
Performance |
| Timeline |
| Odfjell Technology |
| Nordic Mining ASA |
Odfjell Technology and Nordic Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Odfjell Technology and Nordic Mining
The main advantage of trading using opposite Odfjell Technology and Nordic Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Odfjell Technology position performs unexpectedly, Nordic Mining 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 Nordic Mining will offset losses from the drop in Nordic Mining's long position.| Odfjell Technology vs. Jaeren Sparebank | Odfjell Technology vs. Xplora Technologies As | Odfjell Technology vs. Cloudberry Clean Energy | Odfjell Technology vs. Goodtech |
| Nordic Mining vs. Bien Sparebank ASA | Nordic Mining vs. Eidesvik Offshore ASA | Nordic Mining vs. Nidaros Sparebank | Nordic Mining vs. Sparebanken Ost |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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