Correlation Between CREMECOMTRSBI and NORDIC HALIBUT
Can any of the company-specific risk be diversified away by investing in both CREMECOMTRSBI and NORDIC HALIBUT 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 CREMECOMTRSBI and NORDIC HALIBUT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CREMECOMTRSBI DL 001 and NORDIC HALIBUT AS, you can compare the effects of market volatilities on CREMECOMTRSBI and NORDIC HALIBUT 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 CREMECOMTRSBI with a short position of NORDIC HALIBUT. Check out your portfolio center. Please also check ongoing floating volatility patterns of CREMECOMTRSBI and NORDIC HALIBUT.
Diversification Opportunities for CREMECOMTRSBI and NORDIC HALIBUT
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CREMECOMTRSBI and NORDIC is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding CREMECOMTRSBI DL 001 and NORDIC HALIBUT AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NORDIC HALIBUT AS and CREMECOMTRSBI 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 CREMECOMTRSBI DL 001 are associated (or correlated) with NORDIC HALIBUT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NORDIC HALIBUT AS has no effect on the direction of CREMECOMTRSBI i.e., CREMECOMTRSBI and NORDIC HALIBUT go up and down completely randomly.
Pair Corralation between CREMECOMTRSBI and NORDIC HALIBUT
Assuming the 90 days trading horizon CREMECOMTRSBI DL 001 is expected to generate 27.02 times more return on investment than NORDIC HALIBUT. However, CREMECOMTRSBI is 27.02 times more volatile than NORDIC HALIBUT AS. It trades about 0.13 of its potential returns per unit of risk. NORDIC HALIBUT AS is currently generating about -0.25 per unit of risk. If you would invest 53.00 in CREMECOMTRSBI DL 001 on September 13, 2024 and sell it today you would lose (33.00) from holding CREMECOMTRSBI DL 001 or give up 62.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CREMECOMTRSBI DL 001 vs. NORDIC HALIBUT AS
Performance |
| Timeline |
| CREMECOMTRSBI DL 001 |
| NORDIC HALIBUT AS |
CREMECOMTRSBI and NORDIC HALIBUT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CREMECOMTRSBI and NORDIC HALIBUT
The main advantage of trading using opposite CREMECOMTRSBI and NORDIC HALIBUT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CREMECOMTRSBI position performs unexpectedly, NORDIC HALIBUT 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 HALIBUT will offset losses from the drop in NORDIC HALIBUT's long position.| CREMECOMTRSBI vs. Office Properties Income | CREMECOMTRSBI vs. CITY OFFICE REIT | CREMECOMTRSBI vs. Superior Plus Corp | CREMECOMTRSBI vs. SIVERS SEMICONDUCTORS AB |
| NORDIC HALIBUT vs. HEALTHCARE REAL A | NORDIC HALIBUT vs. ANTA SPORTS PRODUCT | NORDIC HALIBUT vs. Big 5 Sporting | NORDIC HALIBUT vs. ATRYS HEALTH SA |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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