Correlation Between Raketech Group and Nordic Iron
Can any of the company-specific risk be diversified away by investing in both Raketech Group and Nordic Iron 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 Raketech Group and Nordic Iron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Raketech Group Holding and Nordic Iron Ore, you can compare the effects of market volatilities on Raketech Group and Nordic Iron 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 Raketech Group with a short position of Nordic Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Raketech Group and Nordic Iron.
Diversification Opportunities for Raketech Group and Nordic Iron
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Raketech and Nordic is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Raketech Group Holding and Nordic Iron Ore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordic Iron Ore and Raketech Group 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 Raketech Group Holding are associated (or correlated) with Nordic Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordic Iron Ore has no effect on the direction of Raketech Group i.e., Raketech Group and Nordic Iron go up and down completely randomly.
Pair Corralation between Raketech Group and Nordic Iron
Assuming the 90 days trading horizon Raketech Group Holding is expected to under-perform the Nordic Iron. In addition to that, Raketech Group is 1.19 times more volatile than Nordic Iron Ore. It trades about -0.16 of its total potential returns per unit of risk. Nordic Iron Ore is currently generating about 0.05 per unit of volatility. If you would invest 466.00 in Nordic Iron Ore on September 3, 2024 and sell it today you would earn a total of 34.00 from holding Nordic Iron Ore or generate 7.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Raketech Group Holding vs. Nordic Iron Ore
Performance |
| Timeline |
| Raketech Group Holding |
| Nordic Iron Ore |
Raketech Group and Nordic Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Raketech Group and Nordic Iron
The main advantage of trading using opposite Raketech Group and Nordic Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Raketech Group position performs unexpectedly, Nordic Iron 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 Iron will offset losses from the drop in Nordic Iron's long position.| Raketech Group vs. Catena Media plc | Raketech Group vs. Better Collective | Raketech Group vs. Betsson AB | Raketech Group vs. Kambi Group PLC |
| Nordic Iron vs. Leading Edge Materials | Nordic Iron vs. Alzinova AB | Nordic Iron vs. SaltX Technology Holding | Nordic Iron vs. KABE Group 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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