Correlation Between NORDIC HALIBUT and Charles Schwab

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

Diversification Opportunities for NORDIC HALIBUT and Charles Schwab

-0.82

Correlation Coefficient

NORDIC HALIBUT  Charles Schwab

Pay attention - limited upside

The 3 months correlation between NORDIC and Charles is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding NORDIC HALIBUT AS and The Charles Schwab in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charles Schwab 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 Charles Schwab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Charles Schwab has no effect on the direction of NORDIC HALIBUT i.e., NORDIC HALIBUT and Charles Schwab go up and down completely randomly.

Pair Corralation between NORDIC HALIBUT and Charles Schwab

Assuming the 90 days horizon NORDIC HALIBUT AS is expected to under-perform the Charles Schwab. In addition to that, NORDIC HALIBUT is 2.35 times more volatile than The Charles Schwab. It trades about -0.13 of its total potential returns per unit of risk. The Charles Schwab is currently generating about -0.2 per unit of volatility. If you would invest  7,596  in The Charles Schwab on September 22, 2024 and sell it today you would lose (509.00) from holding The Charles Schwab or give up 6.7% of portfolio value over 90 days.

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

NORDIC HALIBUT AS  vs.  The Charles Schwab

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 uncertain 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.

Charles Schwab

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in The Charles Schwab are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Charles Schwab reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NORDIC HALIBUT and Charles Schwab

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

The idea behind NORDIC HALIBUT AS and The Charles Schwab 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.