Correlation Between SD Standard and Nordic Technology
Can any of the company-specific risk be diversified away by investing in both SD Standard and Nordic Technology 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 SD Standard and Nordic Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SD Standard Drilling and Nordic Technology Group, you can compare the effects of market volatilities on SD Standard and Nordic Technology 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 SD Standard with a short position of Nordic Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of SD Standard and Nordic Technology.
Diversification Opportunities for SD Standard and Nordic Technology
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between SDSD and Nordic is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding SD Standard Drilling and Nordic Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordic Technology and SD Standard 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 SD Standard Drilling are associated (or correlated) with Nordic Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordic Technology has no effect on the direction of SD Standard i.e., SD Standard and Nordic Technology go up and down completely randomly.
Pair Corralation between SD Standard and Nordic Technology
Assuming the 90 days trading horizon SD Standard Drilling is expected to generate 0.05 times more return on investment than Nordic Technology. However, SD Standard Drilling is 19.07 times less risky than Nordic Technology. It trades about 0.06 of its potential returns per unit of risk. Nordic Technology Group is currently generating about -0.28 per unit of risk. If you would invest 169.00 in SD Standard Drilling on October 26, 2024 and sell it today you would earn a total of 1.00 from holding SD Standard Drilling or generate 0.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SD Standard Drilling vs. Nordic Technology Group
Performance |
| Timeline |
| SD Standard Drilling |
| Nordic Technology |
SD Standard and Nordic Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SD Standard and Nordic Technology
The main advantage of trading using opposite SD Standard and Nordic Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SD Standard position performs unexpectedly, Nordic Technology 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 Technology will offset losses from the drop in Nordic Technology's long position.| SD Standard vs. Odfjell Drilling | SD Standard vs. Solstad Offsho | SD Standard vs. Reach Subsea | SD Standard vs. Eidesvik Offshore ASA |
| Nordic Technology vs. Austevoll Seafood ASA | Nordic Technology vs. Morrow Bank ASA | Nordic Technology vs. Sea1 Offshore | Nordic Technology vs. Instabank 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |