Correlation Between NORDIC HALIBUT and Equitable Holdings

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

Diversification Opportunities for NORDIC HALIBUT and Equitable Holdings

-0.73

Correlation Coefficient

NORDIC HALIBUT  Equitable Holdings

Pay attention - limited upside

The 3 months correlation between NORDIC and Equitable is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding NORDIC HALIBUT AS and Equitable Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equitable Holdings 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 Equitable Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equitable Holdings has no effect on the direction of NORDIC HALIBUT i.e., NORDIC HALIBUT and Equitable Holdings go up and down completely randomly.

Pair Corralation between NORDIC HALIBUT and Equitable Holdings

Assuming the 90 days horizon NORDIC HALIBUT AS is expected to under-perform the Equitable Holdings. In addition to that, NORDIC HALIBUT is 1.87 times more volatile than Equitable Holdings. It trades about -0.03 of its total potential returns per unit of risk. Equitable Holdings is currently generating about 0.53 per unit of volatility. If you would invest  4,420  in Equitable Holdings on October 22, 2024 and sell it today you would earn a total of  520.00  from holding Equitable Holdings or generate 11.76% return on investment over 90 days.

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

NORDIC HALIBUT AS  vs.  Equitable Holdings

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 February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Equitable Holdings

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Equitable Holdings are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Equitable Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NORDIC HALIBUT and Equitable Holdings

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

The idea behind NORDIC HALIBUT AS and Equitable Holdings 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.