Correlation Between Constellium and Norsk Hydro
Can any of the company-specific risk be diversified away by investing in both Constellium and Norsk Hydro 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 Constellium and Norsk Hydro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Constellium Nv and Norsk Hydro ASA, you can compare the effects of market volatilities on Constellium and Norsk Hydro 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 Constellium with a short position of Norsk Hydro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Constellium and Norsk Hydro.
Diversification Opportunities for Constellium and Norsk Hydro
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Constellium and Norsk is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Constellium Nv and Norsk Hydro ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Norsk Hydro ASA and Constellium 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 Constellium Nv are associated (or correlated) with Norsk Hydro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Norsk Hydro ASA has no effect on the direction of Constellium i.e., Constellium and Norsk Hydro go up and down completely randomly.
Pair Corralation between Constellium and Norsk Hydro
If you would invest (100.00) in Norsk Hydro ASA on December 2, 2024 and sell it today you would earn a total of 100.00 from holding Norsk Hydro ASA or generate -100.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
Constellium Nv vs. Norsk Hydro ASA
Performance |
Timeline |
Constellium Nv |
Norsk Hydro ASA |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Constellium and Norsk Hydro Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Constellium and Norsk Hydro
The main advantage of trading using opposite Constellium and Norsk Hydro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Constellium position performs unexpectedly, Norsk Hydro 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 Norsk Hydro will offset losses from the drop in Norsk Hydro's long position.Constellium vs. Century Aluminum | Constellium vs. Alcoa Corp | Constellium vs. China Hongqiao Group | Constellium vs. Norsk Hydro ASA |
Norsk Hydro vs. Kaiser Aluminum | Norsk Hydro vs. Century Aluminum | Norsk Hydro vs. China Hongqiao Group | Norsk Hydro vs. Alcoa Corp |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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