Correlation Between Xplora Technologies and Norsk Hydro
Can any of the company-specific risk be diversified away by investing in both Xplora Technologies 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 Xplora Technologies and Norsk Hydro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xplora Technologies As and Norsk Hydro ASA, you can compare the effects of market volatilities on Xplora Technologies 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 Xplora Technologies with a short position of Norsk Hydro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xplora Technologies and Norsk Hydro.
Diversification Opportunities for Xplora Technologies and Norsk Hydro
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xplora and Norsk is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Xplora Technologies As 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 Xplora Technologies 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 Xplora Technologies As 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 Xplora Technologies i.e., Xplora Technologies and Norsk Hydro go up and down completely randomly.
Pair Corralation between Xplora Technologies and Norsk Hydro
Assuming the 90 days trading horizon Xplora Technologies As is expected to under-perform the Norsk Hydro. In addition to that, Xplora Technologies is 1.21 times more volatile than Norsk Hydro ASA. It trades about -0.12 of its total potential returns per unit of risk. Norsk Hydro ASA is currently generating about 0.18 per unit of volatility. If you would invest 6,392 in Norsk Hydro ASA on November 2, 2024 and sell it today you would earn a total of 384.00 from holding Norsk Hydro ASA or generate 6.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Xplora Technologies As vs. Norsk Hydro ASA
Performance |
| Timeline |
| Xplora Technologies |
| Norsk Hydro ASA |
Xplora Technologies and Norsk Hydro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xplora Technologies and Norsk Hydro
The main advantage of trading using opposite Xplora Technologies and Norsk Hydro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xplora Technologies 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.| Xplora Technologies vs. Airthings ASA | Xplora Technologies vs. Nordic Unmanned As | Xplora Technologies vs. Pexip Holding ASA | Xplora Technologies vs. Huddlestock Fintech As |
| Norsk Hydro vs. Yara International ASA | Norsk Hydro vs. Equinor ASA | Norsk Hydro vs. Telenor ASA | Norsk Hydro vs. Orkla 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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