Correlation Between Cardano and Nordnet One

Can any of the company-specific risk be diversified away by investing in both Cardano and Nordnet One 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 Cardano and Nordnet One into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cardano and Nordnet One Balansert, you can compare the effects of market volatilities on Cardano and Nordnet One 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 Cardano with a short position of Nordnet One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardano and Nordnet One.

Diversification Opportunities for Cardano and Nordnet One

0.54

Correlation Coefficient

Cardano  Nordnet One

Very weak diversification

The 3 months correlation between Cardano and Nordnet is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Cardano and Nordnet One Balansert in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordnet One Balansert and Cardano 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 Cardano are associated (or correlated) with Nordnet One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordnet One Balansert has no effect on the direction of Cardano i.e., Cardano and Nordnet One go up and down completely randomly.

Pair Corralation between Cardano and Nordnet One

Assuming the 90 days trading horizon Cardano is expected to generate 21.41 times more return on investment than Nordnet One. However, Cardano is 21.41 times more volatile than Nordnet One Balansert. It trades about 0.23 of its potential returns per unit of risk. Nordnet One Balansert is currently generating about 0.05 per unit of risk. If you would invest  36.00  in Cardano on October 12, 2024 and sell it today you would earn a total of  55.00  from holding Cardano or generate 152.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	92.06%
Values	Daily Returns

Cardano  vs.  Nordnet One Balansert

Cardano

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cardano are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Cardano exhibited solid returns over the last few months and may actually be approaching a breakup point.

Nordnet One Balansert

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Nordnet One Balansert are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. Even with relatively invariable basic indicators, Nordnet One is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Cardano and Nordnet One

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

The idea behind Cardano and Nordnet One Balansert 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.