Correlation Between NORDIC HALIBUT and Carrier Global

Can any of the company-specific risk be diversified away by investing in both NORDIC HALIBUT and Carrier 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 NORDIC HALIBUT and Carrier Global 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 Carrier Global, you can compare the effects of market volatilities on NORDIC HALIBUT and Carrier 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 NORDIC HALIBUT with a short position of Carrier Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of NORDIC HALIBUT and Carrier Global.

Diversification Opportunities for NORDIC HALIBUT and Carrier Global

0.13

Correlation Coefficient

NORDIC HALIBUT  Carrier Global

Average diversification

The 3 months correlation between NORDIC and Carrier is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding NORDIC HALIBUT AS and Carrier Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carrier Global 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 Carrier Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carrier Global has no effect on the direction of NORDIC HALIBUT i.e., NORDIC HALIBUT and Carrier Global go up and down completely randomly.

Pair Corralation between NORDIC HALIBUT and Carrier Global

Assuming the 90 days horizon NORDIC HALIBUT AS is expected to under-perform the Carrier Global. In addition to that, NORDIC HALIBUT is 1.22 times more volatile than Carrier Global. It trades about -0.18 of its total potential returns per unit of risk. Carrier Global is currently generating about 0.02 per unit of volatility. If you would invest  6,896  in Carrier Global on September 16, 2024 and sell it today you would earn a total of  90.00  from holding Carrier Global or generate 1.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

NORDIC HALIBUT AS  vs.  Carrier Global

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 fragile 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.

Carrier Global

Risk-Adjusted Performance

1 of 100

Weak

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

Pair Trading with NORDIC HALIBUT and Carrier Global

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

The idea behind NORDIC HALIBUT AS and Carrier Global 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..