Correlation Between PCI Biotech and Nordic Mining
Can any of the company-specific risk be diversified away by investing in both PCI Biotech 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 PCI Biotech and Nordic Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PCI Biotech Holding and Nordic Mining ASA, you can compare the effects of market volatilities on PCI Biotech 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 PCI Biotech with a short position of Nordic Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of PCI Biotech and Nordic Mining.
Diversification Opportunities for PCI Biotech and Nordic Mining
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between PCI and Nordic is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding PCI Biotech Holding 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 PCI Biotech 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 PCI Biotech Holding 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 PCI Biotech i.e., PCI Biotech and Nordic Mining go up and down completely randomly.
Pair Corralation between PCI Biotech and Nordic Mining
Assuming the 90 days trading horizon PCI Biotech Holding is expected to under-perform the Nordic Mining. In addition to that, PCI Biotech is 2.4 times more volatile than Nordic Mining ASA. It trades about -0.2 of its total potential returns per unit of risk. Nordic Mining ASA is currently generating about -0.03 per unit of volatility. If you would invest 2,600 in Nordic Mining ASA on August 25, 2024 and sell it today you would lose (50.00) from holding Nordic Mining ASA or give up 1.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PCI Biotech Holding vs. Nordic Mining ASA
Performance |
| Timeline |
| PCI Biotech Holding |
| Nordic Mining ASA |
PCI Biotech and Nordic Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PCI Biotech and Nordic Mining
The main advantage of trading using opposite PCI Biotech and Nordic Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PCI Biotech 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.| PCI Biotech vs. DnB ASA | PCI Biotech vs. Storebrand ASA | PCI Biotech vs. Sparebank 1 SR | PCI Biotech vs. Telenor ASA |
| Nordic Mining vs. Elkem ASA | Nordic Mining vs. Vow ASA | Nordic Mining vs. North Energy ASA | Nordic Mining vs. Arcticzymes Technologies 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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