Correlation Between New Nordic and Zinzino AB

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

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

Diversification Opportunities for New Nordic and Zinzino AB

0.24

Correlation Coefficient

New Nordic  Zinzino AB

Modest diversification

The 3 months correlation between New and Zinzino is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding New Nordic Healthbrands and Zinzino AB Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zinzino AB Series and New 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 New Nordic Healthbrands are associated (or correlated) with Zinzino AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zinzino AB Series has no effect on the direction of New Nordic i.e., New Nordic and Zinzino AB go up and down completely randomly.

Pair Corralation between New Nordic and Zinzino AB

Assuming the 90 days trading horizon New Nordic is expected to generate 3.93 times less return on investment than Zinzino AB. But when comparing it to its historical volatility, New Nordic Healthbrands is 1.27 times less risky than Zinzino AB. It trades about 0.07 of its potential returns per unit of risk. Zinzino AB Series is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  8,800  in Zinzino AB Series on December 2, 2024 and sell it today you would earn a total of  4,180  from holding Zinzino AB Series or generate 47.5% return on investment over 90 days.

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

New Nordic Healthbrands  vs.  Zinzino AB Series

New Nordic Healthbrands

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in New Nordic Healthbrands are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical indicators, New Nordic may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Zinzino AB Series

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Zinzino AB Series are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Zinzino AB unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with New Nordic and Zinzino AB

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

The idea behind New Nordic Healthbrands and Zinzino AB Series 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.