Correlation Between TC Energy and Norsk Hydro
Can any of the company-specific risk be diversified away by investing in both TC Energy and Norsk Hydro 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 TC Energy and Norsk Hydro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TC Energy and Norsk Hydro ASA, you can compare the effects of market volatilities on TC Energy and Norsk Hydro 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 TC Energy with a short position of Norsk Hydro. Check out your portfolio center. Please also check ongoing floating volatility patterns of TC Energy and Norsk Hydro.
Diversification Opportunities for TC Energy and Norsk Hydro
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between TRS and Norsk is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding TC Energy and Norsk Hydro ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Norsk Hydro ASA and TC Energy 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 TC Energy are associated (or correlated) with Norsk Hydro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Norsk Hydro ASA has no effect on the direction of TC Energy i.e., TC Energy and Norsk Hydro go up and down completely randomly.
Pair Corralation between TC Energy and Norsk Hydro
Assuming the 90 days horizon TC Energy is expected to under-perform the Norsk Hydro. But the stock apears to be less risky and, when comparing its historical volatility, TC Energy is 1.49 times less risky than Norsk Hydro. The stock trades about -0.12 of its potential returns per unit of risk. The Norsk Hydro ASA is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 560.00 in Norsk Hydro ASA on December 4, 2024 and sell it today you would earn a total of 18.00 from holding Norsk Hydro ASA or generate 3.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TC Energy vs. Norsk Hydro ASA
Performance |
| Timeline |
| TC Energy |
| Norsk Hydro ASA |
TC Energy and Norsk Hydro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TC Energy and Norsk Hydro
The main advantage of trading using opposite TC Energy and Norsk Hydro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TC Energy position performs unexpectedly, Norsk Hydro 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 Norsk Hydro will offset losses from the drop in Norsk Hydro's long position.| TC Energy vs. High Liner Foods | TC Energy vs. Maple Leaf Foods | TC Energy vs. SENECA FOODS A | TC Energy vs. EBRO FOODS |
| Norsk Hydro vs. Caseys General Stores | Norsk Hydro vs. tokentus investment AG | Norsk Hydro vs. PennantPark Investment | Norsk Hydro vs. H2O Retailing |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |