Correlation Between Nel ASA and Greenshift Corp

Can any of the company-specific risk be diversified away by investing in both Nel ASA and Greenshift Corp 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 Nel ASA and Greenshift Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nel ASA and Greenshift Corp, you can compare the effects of market volatilities on Nel ASA and Greenshift Corp 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 Nel ASA with a short position of Greenshift Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nel ASA and Greenshift Corp.

Diversification Opportunities for Nel ASA and Greenshift Corp

0.01

Correlation Coefficient

Nel ASA  Greenshift Corp

Significant diversification

The 3 months correlation between Nel and Greenshift is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Nel ASA and Greenshift Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenshift Corp and Nel ASA 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 Nel ASA are associated (or correlated) with Greenshift Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenshift Corp has no effect on the direction of Nel ASA i.e., Nel ASA and Greenshift Corp go up and down completely randomly.

Pair Corralation between Nel ASA and Greenshift Corp

Assuming the 90 days horizon Nel ASA is expected to generate 1.08 times more return on investment than Greenshift Corp. However, Nel ASA is 1.08 times more volatile than Greenshift Corp. It trades about 0.04 of its potential returns per unit of risk. Greenshift Corp is currently generating about 0.02 per unit of risk. If you would invest  806.00  in Nel ASA on December 26, 2024 and sell it today you would earn a total of  52.00  from holding Nel ASA or generate 6.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.83%
Values	Daily Returns

Nel ASA  vs.  Greenshift Corp

Nel ASA

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nel ASA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Nel ASA showed solid returns over the last few months and may actually be approaching a breakup point.

Greenshift Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Greenshift Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Greenshift Corp may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Nel ASA and Greenshift Corp

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

The idea behind Nel ASA and Greenshift Corp 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .