Correlation Between ANT and Nordea Norwegian

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

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

Diversification Opportunities for ANT and Nordea Norwegian

0.09

Correlation Coefficient

ANT  Nordea Norwegian

Significant diversification

The 3 months correlation between ANT and Nordea is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding ANT and Nordea Norwegian Stars in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordea Norwegian Stars and ANT 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 ANT are associated (or correlated) with Nordea Norwegian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordea Norwegian Stars has no effect on the direction of ANT i.e., ANT and Nordea Norwegian go up and down completely randomly.

Pair Corralation between ANT and Nordea Norwegian

Assuming the 90 days trading horizon ANT is expected to generate 30.95 times more return on investment than Nordea Norwegian. However, ANT is 30.95 times more volatile than Nordea Norwegian Stars. It trades about 0.08 of its potential returns per unit of risk. Nordea Norwegian Stars is currently generating about 0.12 per unit of risk. If you would invest  147.00  in ANT on December 22, 2024 and sell it today you would earn a total of  0.00  from holding ANT or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.31%
Values	Daily Returns

ANT  vs.  Nordea Norwegian Stars

ANT

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ANT are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, ANT exhibited solid returns over the last few months and may actually be approaching a breakup point.

Nordea Norwegian Stars

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nordea Norwegian Stars are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. Despite fairly strong forward indicators, Nordea Norwegian is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with ANT and Nordea Norwegian

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

The idea behind ANT and Nordea Norwegian Stars 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.

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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.