Correlation Between NORDIC HALIBUT and Aena SME

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

Diversification Opportunities for NORDIC HALIBUT and Aena SME

-0.06

Correlation Coefficient

NORDIC HALIBUT  Aena SME

Good diversification

The 3 months correlation between NORDIC and Aena is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding NORDIC HALIBUT AS and Aena SME SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aena SME SA 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 Aena SME. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aena SME SA has no effect on the direction of NORDIC HALIBUT i.e., NORDIC HALIBUT and Aena SME go up and down completely randomly.

Pair Corralation between NORDIC HALIBUT and Aena SME

Assuming the 90 days horizon NORDIC HALIBUT is expected to generate 3.64 times less return on investment than Aena SME. In addition to that, NORDIC HALIBUT is 1.48 times more volatile than Aena SME SA. It trades about 0.02 of its total potential returns per unit of risk. Aena SME SA is currently generating about 0.13 per unit of volatility. If you would invest  19,790  in Aena SME SA on December 28, 2024 and sell it today you would earn a total of  1,970  from holding Aena SME SA or generate 9.95% return on investment over 90 days.

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

NORDIC HALIBUT AS  vs.  Aena SME SA

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.

Aena SME SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aena SME SA are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Aena SME may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with NORDIC HALIBUT and Aena SME

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

The idea behind NORDIC HALIBUT AS and Aena SME SA 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.