Correlation Between NORDIC HALIBUT and POSBO UNSPADRS/20YC1

Can any of the company-specific risk be diversified away by investing in both NORDIC HALIBUT and POSBO UNSPADRS/20YC1 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 POSBO UNSPADRS/20YC1 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 POSBO UNSPADRS20YC1, you can compare the effects of market volatilities on NORDIC HALIBUT and POSBO UNSPADRS/20YC1 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 POSBO UNSPADRS/20YC1. Check out your portfolio center. Please also check ongoing floating volatility patterns of NORDIC HALIBUT and POSBO UNSPADRS/20YC1.

Diversification Opportunities for NORDIC HALIBUT and POSBO UNSPADRS/20YC1

0.02

Correlation Coefficient

NORDIC HALIBUT  POSBO UNSPADRS/20YC1

Significant diversification

The 3 months correlation between NORDIC and POSBO is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding NORDIC HALIBUT AS and POSBO UNSPADRS20YC1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on POSBO UNSPADRS/20YC1 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 POSBO UNSPADRS/20YC1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of POSBO UNSPADRS/20YC1 has no effect on the direction of NORDIC HALIBUT i.e., NORDIC HALIBUT and POSBO UNSPADRS/20YC1 go up and down completely randomly.

Pair Corralation between NORDIC HALIBUT and POSBO UNSPADRS/20YC1

Assuming the 90 days horizon NORDIC HALIBUT is expected to generate 6.4 times less return on investment than POSBO UNSPADRS/20YC1. In addition to that, NORDIC HALIBUT is 1.41 times more volatile than POSBO UNSPADRS20YC1. It trades about 0.01 of its total potential returns per unit of risk. POSBO UNSPADRS20YC1 is currently generating about 0.13 per unit of volatility. If you would invest  1,080  in POSBO UNSPADRS20YC1 on December 28, 2024 and sell it today you would earn a total of  110.00  from holding POSBO UNSPADRS20YC1 or generate 10.19% return on investment over 90 days.

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

NORDIC HALIBUT AS  vs.  POSBO UNSPADRS20YC1

NORDIC HALIBUT AS

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in NORDIC HALIBUT AS are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, NORDIC HALIBUT is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

POSBO UNSPADRS/20YC1

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in POSBO UNSPADRS20YC1 are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain fundamental drivers, POSBO UNSPADRS/20YC1 may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with NORDIC HALIBUT and POSBO UNSPADRS/20YC1

The main advantage of trading using opposite NORDIC HALIBUT and POSBO UNSPADRS/20YC1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NORDIC HALIBUT position performs unexpectedly, POSBO UNSPADRS/20YC1 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 POSBO UNSPADRS/20YC1 will offset losses from the drop in POSBO UNSPADRS/20YC1's long position.

The idea behind NORDIC HALIBUT AS and POSBO UNSPADRS20YC1 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.