Correlation Between Sea1 Offshore and Nordhealth
Can any of the company-specific risk be diversified away by investing in both Sea1 Offshore and Nordhealth 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 Sea1 Offshore and Nordhealth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sea1 Offshore and Nordhealth AS, you can compare the effects of market volatilities on Sea1 Offshore and Nordhealth 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 Sea1 Offshore with a short position of Nordhealth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sea1 Offshore and Nordhealth.
Diversification Opportunities for Sea1 Offshore and Nordhealth
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sea1 and Nordhealth is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Sea1 Offshore and Nordhealth AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordhealth AS and Sea1 Offshore 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 Sea1 Offshore are associated (or correlated) with Nordhealth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordhealth AS has no effect on the direction of Sea1 Offshore i.e., Sea1 Offshore and Nordhealth go up and down completely randomly.
Pair Corralation between Sea1 Offshore and Nordhealth
Assuming the 90 days trading horizon Sea1 Offshore is expected to generate 1.66 times less return on investment than Nordhealth. But when comparing it to its historical volatility, Sea1 Offshore is 1.58 times less risky than Nordhealth. It trades about 0.03 of its potential returns per unit of risk. Nordhealth AS is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 3,490 in Nordhealth AS on August 25, 2024 and sell it today you would earn a total of 260.00 from holding Nordhealth AS or generate 7.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sea1 Offshore vs. Nordhealth AS
Performance |
| Timeline |
| Sea1 Offshore |
| Nordhealth AS |
Sea1 Offshore and Nordhealth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sea1 Offshore and Nordhealth
The main advantage of trading using opposite Sea1 Offshore and Nordhealth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sea1 Offshore position performs unexpectedly, Nordhealth 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 Nordhealth will offset losses from the drop in Nordhealth's long position.| Sea1 Offshore vs. Equinor ASA | Sea1 Offshore vs. DnB ASA | Sea1 Offshore vs. Aker BP ASA | Sea1 Offshore vs. Telenor ASA |
| Nordhealth vs. Carasent ASA | Nordhealth vs. Bouvet | Nordhealth vs. Elkem ASA | Nordhealth vs. Integrated Wind Solutions |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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