Correlation Between Techstep ASA and Nordic Mining
Can any of the company-specific risk be diversified away by investing in both Techstep ASA 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 Techstep ASA and Nordic Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Techstep ASA and Nordic Mining ASA, you can compare the effects of market volatilities on Techstep ASA 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 Techstep ASA with a short position of Nordic Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Techstep ASA and Nordic Mining.
Diversification Opportunities for Techstep ASA and Nordic Mining
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Techstep and Nordic is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Techstep ASA 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 Techstep ASA 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 Techstep ASA 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 Techstep ASA i.e., Techstep ASA and Nordic Mining go up and down completely randomly.
Pair Corralation between Techstep ASA and Nordic Mining
Assuming the 90 days trading horizon Techstep ASA is expected to generate 5.8 times less return on investment than Nordic Mining. In addition to that, Techstep ASA is 1.38 times more volatile than Nordic Mining ASA. It trades about 0.01 of its total potential returns per unit of risk. Nordic Mining ASA is currently generating about 0.06 per unit of volatility. If you would invest 1,224 in Nordic Mining ASA on December 11, 2024 and sell it today you would earn a total of 878.00 from holding Nordic Mining ASA or generate 71.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Techstep ASA vs. Nordic Mining ASA
Performance |
| Timeline |
| Techstep ASA |
| Nordic Mining ASA |
Techstep ASA and Nordic Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Techstep ASA and Nordic Mining
The main advantage of trading using opposite Techstep ASA and Nordic Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Techstep ASA 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.| Techstep ASA vs. Next Biometrics Group | ||
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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 CEOs Directory module to screen CEOs from public companies around the world.
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