Correlation Between Nordnet One and Storebrand Global

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

By analyzing existing cross correlation between Nordnet One Balansert and Storebrand Global Solutions, you can compare the effects of market volatilities on Nordnet One and Storebrand Global 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 Storebrand Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordnet One and Storebrand Global.

Diversification Opportunities for Nordnet One and Storebrand Global

0.91

Correlation Coefficient

Nordnet One  Storebrand Global

Almost no diversification

The 3 months correlation between Nordnet and Storebrand is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Nordnet One Balansert and Storebrand Global Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Storebrand Global 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 Balansert are associated (or correlated) with Storebrand Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Storebrand Global has no effect on the direction of Nordnet One i.e., Nordnet One and Storebrand Global go up and down completely randomly.

Pair Corralation between Nordnet One and Storebrand Global

Assuming the 90 days trading horizon Nordnet One Balansert is expected to generate 0.56 times more return on investment than Storebrand Global. However, Nordnet One Balansert is 1.8 times less risky than Storebrand Global. It trades about -0.11 of its potential returns per unit of risk. Storebrand Global Solutions is currently generating about -0.11 per unit of risk. If you would invest  13,786  in Nordnet One Balansert on December 29, 2024 and sell it today you would lose (411.00) from holding Nordnet One Balansert or give up 2.98% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.41%
Values	Daily Returns

Nordnet One Balansert  vs.  Storebrand Global Solutions

Nordnet One Balansert

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nordnet One Balansert 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.

Storebrand Global

Risk-Adjusted Performance

Very Weak

Over the last 90 days Storebrand Global Solutions has generated negative risk-adjusted returns adding no value to fund investors. In spite of rather sound technical and fundamental indicators, Storebrand Global is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Nordnet One and Storebrand Global

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

The idea behind Nordnet One Balansert and Storebrand Global Solutions 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.