Correlation Between Nordic Iron and Xintela AB

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

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

Diversification Opportunities for Nordic Iron and Xintela AB

-0.39

Correlation Coefficient

Nordic Iron  Xintela AB

Very good diversification

The 3 months correlation between Nordic and Xintela is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Iron Ore and Xintela AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xintela AB and Nordic Iron 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 Iron Ore are associated (or correlated) with Xintela AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xintela AB has no effect on the direction of Nordic Iron i.e., Nordic Iron and Xintela AB go up and down completely randomly.

Pair Corralation between Nordic Iron and Xintela AB

Assuming the 90 days trading horizon Nordic Iron Ore is expected to under-perform the Xintela AB. But the stock apears to be less risky and, when comparing its historical volatility, Nordic Iron Ore is 1.4 times less risky than Xintela AB. The stock trades about 0.0 of its potential returns per unit of risk. The Xintela AB is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  50.00  in Xintela AB on October 11, 2024 and sell it today you would lose (11.00) from holding Xintela AB or give up 22.0% of portfolio value over 90 days.

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

Nordic Iron Ore  vs.  Xintela AB

Nordic Iron Ore

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nordic Iron Ore are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Nordic Iron unveiled solid returns over the last few months and may actually be approaching a breakup point.

Xintela AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xintela AB 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.

Pair Trading with Nordic Iron and Xintela AB

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

The idea behind Nordic Iron Ore and Xintela 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.