Correlation Between NORDIC HALIBUT and Impact ISR

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

By analyzing existing cross correlation between NORDIC HALIBUT AS and Impact ISR Performance, you can compare the effects of market volatilities on NORDIC HALIBUT and Impact ISR 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 NORDIC HALIBUT with a short position of Impact ISR. Check out your portfolio center. Please also check ongoing floating volatility patterns of NORDIC HALIBUT and Impact ISR.

Diversification Opportunities for NORDIC HALIBUT and Impact ISR

0.42

Correlation Coefficient

NORDIC HALIBUT  Impact ISR

Very weak diversification

The 3 months correlation between NORDIC and Impact is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding NORDIC HALIBUT AS and Impact ISR Performance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impact ISR Performance and NORDIC HALIBUT 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 NORDIC HALIBUT AS are associated (or correlated) with Impact ISR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impact ISR Performance has no effect on the direction of NORDIC HALIBUT i.e., NORDIC HALIBUT and Impact ISR go up and down completely randomly.

Pair Corralation between NORDIC HALIBUT and Impact ISR

Assuming the 90 days horizon NORDIC HALIBUT AS is expected to under-perform the Impact ISR. In addition to that, NORDIC HALIBUT is 5.93 times more volatile than Impact ISR Performance. It trades about -0.23 of its total potential returns per unit of risk. Impact ISR Performance is currently generating about -0.02 per unit of volatility. If you would invest  5,336  in Impact ISR Performance on September 23, 2024 and sell it today you would lose (11.00) from holding Impact ISR Performance or give up 0.21% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

NORDIC HALIBUT AS  vs.  Impact ISR Performance

NORDIC HALIBUT AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NORDIC HALIBUT AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Impact ISR Performance

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Impact ISR Performance has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly stable basic indicators, Impact ISR is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with NORDIC HALIBUT and Impact ISR

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

The idea behind NORDIC HALIBUT AS and Impact ISR Performance 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.