Correlation Between Dalata Hotel and Nordnet One

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

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

Diversification Opportunities for Dalata Hotel and Nordnet One

0.63

Correlation Coefficient

Dalata Hotel  Nordnet One

Poor diversification

The 3 months correlation between Dalata and Nordnet is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Dalata Hotel Group and Nordnet One Forsiktig in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordnet One Forsiktig and Dalata Hotel 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 Dalata Hotel Group 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 Forsiktig has no effect on the direction of Dalata Hotel i.e., Dalata Hotel and Nordnet One go up and down completely randomly.

Pair Corralation between Dalata Hotel and Nordnet One

Assuming the 90 days trading horizon Dalata Hotel Group is expected to generate 6.1 times more return on investment than Nordnet One. However, Dalata Hotel is 6.1 times more volatile than Nordnet One Forsiktig. It trades about 0.12 of its potential returns per unit of risk. Nordnet One Forsiktig is currently generating about 0.21 per unit of risk. If you would invest  405.00  in Dalata Hotel Group on September 15, 2024 and sell it today you would earn a total of  42.00  from holding Dalata Hotel Group or generate 10.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	96.92%
Values	Daily Returns

Dalata Hotel Group  vs.  Nordnet One Forsiktig

Dalata Hotel Group

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dalata Hotel Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak technical and fundamental indicators, Dalata Hotel may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Nordnet One Forsiktig

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Nordnet One Forsiktig are ranked lower than 16 (%) 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 current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Dalata Hotel and Nordnet One

The main advantage of trading using opposite Dalata Hotel and Nordnet One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dalata Hotel 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 Dalata Hotel Group and Nordnet One Forsiktig 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.