Correlation Between NORDIC HALIBUT and Vale SA
Can any of the company-specific risk be diversified away by investing in both NORDIC HALIBUT and Vale SA 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 Vale SA 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 Vale SA, you can compare the effects of market volatilities on NORDIC HALIBUT and Vale SA 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 Vale SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of NORDIC HALIBUT and Vale SA.
Diversification Opportunities for NORDIC HALIBUT and Vale SA
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between NORDIC and Vale is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding NORDIC HALIBUT AS and Vale SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vale 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 Vale SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vale SA has no effect on the direction of NORDIC HALIBUT i.e., NORDIC HALIBUT and Vale SA go up and down completely randomly.
Pair Corralation between NORDIC HALIBUT and Vale SA
Assuming the 90 days horizon NORDIC HALIBUT is expected to generate 4.94 times less return on investment than Vale SA. In addition to that, NORDIC HALIBUT is 1.13 times more volatile than Vale SA. It trades about 0.02 of its total potential returns per unit of risk. Vale SA is currently generating about 0.14 per unit of volatility. If you would invest 819.00 in Vale SA on December 28, 2024 and sell it today you would earn a total of 111.00 from holding Vale SA or generate 13.55% 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. Vale SA
Performance |
Timeline |
NORDIC HALIBUT AS |
Vale SA |
NORDIC HALIBUT and Vale SA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with NORDIC HALIBUT and Vale SA
The main advantage of trading using opposite NORDIC HALIBUT and Vale SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NORDIC HALIBUT position performs unexpectedly, Vale SA 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 Vale SA will offset losses from the drop in Vale SA's long position.NORDIC HALIBUT vs. Nomad Foods | NORDIC HALIBUT vs. Suntory Beverage Food | NORDIC HALIBUT vs. United Natural Foods | NORDIC HALIBUT vs. TYSON FOODS A |
Vale SA vs. Warner Music Group | Vale SA vs. Darden Restaurants | Vale SA vs. Luckin Coffee | Vale SA vs. ETFS Coffee ETC |
Check out your portfolio center.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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |