Correlation Between Nordnet One and Nordnet Teknologi

Can any of the company-specific risk be diversified away by investing in both Nordnet One and Nordnet Teknologi 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 Nordnet One and Nordnet Teknologi into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nordnet One Forsiktig and Nordnet Teknologi Indeks, you can compare the effects of market volatilities on Nordnet One and Nordnet Teknologi 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 Nordnet One with a short position of Nordnet Teknologi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordnet One and Nordnet Teknologi.

Diversification Opportunities for Nordnet One and Nordnet Teknologi

0.81

Correlation Coefficient

Nordnet One  Nordnet Teknologi

Very poor diversification

The 3 months correlation between Nordnet and Nordnet is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Nordnet One Forsiktig and Nordnet Teknologi Indeks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordnet Teknologi Indeks and Nordnet One 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 Nordnet One Forsiktig are associated (or correlated) with Nordnet Teknologi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordnet Teknologi Indeks has no effect on the direction of Nordnet One i.e., Nordnet One and Nordnet Teknologi go up and down completely randomly.

Pair Corralation between Nordnet One and Nordnet Teknologi

Assuming the 90 days trading horizon Nordnet One is expected to generate 5.92 times less return on investment than Nordnet Teknologi. But when comparing it to its historical volatility, Nordnet One Forsiktig is 5.26 times less risky than Nordnet Teknologi. It trades about 0.11 of its potential returns per unit of risk. Nordnet Teknologi Indeks is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  21,545  in Nordnet Teknologi Indeks on October 9, 2024 and sell it today you would earn a total of  1,755  from holding Nordnet Teknologi Indeks or generate 8.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.31%
Values	Daily Returns

Nordnet One Forsiktig  vs.  Nordnet Teknologi Indeks

Nordnet One Forsiktig

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Nordnet One Forsiktig has generated negative risk-adjusted returns adding no value to fund investors. Even with relatively invariable basic indicators, Nordnet One is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Nordnet Teknologi Indeks

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Nordnet Teknologi Indeks has generated negative risk-adjusted returns adding no value to fund investors. In spite of very weak primary indicators, Nordnet Teknologi may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Nordnet One and Nordnet Teknologi

The main advantage of trading using opposite Nordnet One and Nordnet Teknologi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordnet One position performs unexpectedly, Nordnet Teknologi 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 Nordnet Teknologi will offset losses from the drop in Nordnet Teknologi's long position.

The idea behind Nordnet One Forsiktig and Nordnet Teknologi Indeks pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.