Correlation Between Nordic Asia and Upsales Technology

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

By analyzing existing cross correlation between Nordic Asia Investment and Upsales Technology AB, you can compare the effects of market volatilities on Nordic Asia and Upsales Technology 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 Nordic Asia with a short position of Upsales Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Asia and Upsales Technology.

Diversification Opportunities for Nordic Asia and Upsales Technology

-0.2

Correlation Coefficient

Nordic Asia  Upsales Technology

Good diversification

The 3 months correlation between Nordic and Upsales is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Asia Investment and Upsales Technology AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Upsales Technology and Nordic Asia 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 Nordic Asia Investment are associated (or correlated) with Upsales Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Upsales Technology has no effect on the direction of Nordic Asia i.e., Nordic Asia and Upsales Technology go up and down completely randomly.

Pair Corralation between Nordic Asia and Upsales Technology

Assuming the 90 days trading horizon Nordic Asia Investment is expected to under-perform the Upsales Technology. But the stock apears to be less risky and, when comparing its historical volatility, Nordic Asia Investment is 1.01 times less risky than Upsales Technology. The stock trades about -0.01 of its potential returns per unit of risk. The Upsales Technology AB is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  3,200  in Upsales Technology AB on December 3, 2024 and sell it today you would earn a total of  300.00  from holding Upsales Technology AB or generate 9.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Nordic Asia Investment  vs.  Upsales Technology AB

Nordic Asia Investment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nordic Asia Investment has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward indicators, Nordic Asia is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Upsales Technology

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Upsales Technology AB are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Upsales Technology may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Nordic Asia and Upsales Technology

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

The idea behind Nordic Asia Investment and Upsales Technology AB 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.