Correlation Between Handelsinvest Danske and North Media

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

By analyzing existing cross correlation between Handelsinvest Danske Obligationer and North Media AS, you can compare the effects of market volatilities on Handelsinvest Danske and North Media 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 Handelsinvest Danske with a short position of North Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Handelsinvest Danske and North Media.

Diversification Opportunities for Handelsinvest Danske and North Media

-0.78

Correlation Coefficient

Handelsinvest Danske  North Media

Pay attention - limited upside

The 3 months correlation between Handelsinvest and North is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Handelsinvest Danske Obligatio and North Media AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North Media AS and Handelsinvest Danske 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 Handelsinvest Danske Obligationer are associated (or correlated) with North Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North Media AS has no effect on the direction of Handelsinvest Danske i.e., Handelsinvest Danske and North Media go up and down completely randomly.

Pair Corralation between Handelsinvest Danske and North Media

Assuming the 90 days trading horizon Handelsinvest Danske Obligationer is expected to under-perform the North Media. But the stock apears to be less risky and, when comparing its historical volatility, Handelsinvest Danske Obligationer is 17.22 times less risky than North Media. The stock trades about -0.13 of its potential returns per unit of risk. The North Media AS is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  4,770  in North Media AS on October 26, 2024 and sell it today you would earn a total of  230.00  from holding North Media AS or generate 4.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	94.74%
Values	Daily Returns

Handelsinvest Danske Obligatio  vs.  North Media AS

Handelsinvest Danske

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Handelsinvest Danske Obligationer are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong forward-looking signals, Handelsinvest Danske is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

North Media AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days North Media AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Handelsinvest Danske and North Media

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

The idea behind Handelsinvest Danske Obligationer and North Media AS 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.