Correlation Between NAXS Nordic and Havsfrun Investment

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

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

Diversification Opportunities for NAXS Nordic and Havsfrun Investment

-0.78

Correlation Coefficient

NAXS Nordic  Havsfrun Investment

Pay attention - limited upside

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

Pair Corralation between NAXS Nordic and Havsfrun Investment

Assuming the 90 days trading horizon NAXS Nordic Access is expected to under-perform the Havsfrun Investment. But the stock apears to be less risky and, when comparing its historical volatility, NAXS Nordic Access is 2.87 times less risky than Havsfrun Investment. The stock trades about -0.3 of its potential returns per unit of risk. The Havsfrun Investment AB is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,135  in Havsfrun Investment AB on September 23, 2024 and sell it today you would earn a total of  95.00  from holding Havsfrun Investment AB or generate 8.37% return on investment over 90 days.

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

NAXS Nordic Access  vs.  Havsfrun Investment AB

NAXS Nordic Access

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NAXS Nordic Access has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Havsfrun Investment

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Havsfrun Investment AB are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Havsfrun Investment may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with NAXS Nordic and Havsfrun Investment

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

The idea behind NAXS Nordic Access and Havsfrun Investment 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.