Correlation Between Norsk Hydro and ZIM Integrated
Can any of the company-specific risk be diversified away by investing in both Norsk Hydro and ZIM Integrated 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 Norsk Hydro and ZIM Integrated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Norsk Hydro ASA and ZIM Integrated Shipping, you can compare the effects of market volatilities on Norsk Hydro and ZIM Integrated 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 Norsk Hydro with a short position of ZIM Integrated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norsk Hydro and ZIM Integrated.
Diversification Opportunities for Norsk Hydro and ZIM Integrated
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Norsk and ZIM is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Norsk Hydro ASA and ZIM Integrated Shipping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZIM Integrated Shipping and Norsk Hydro 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 Norsk Hydro ASA are associated (or correlated) with ZIM Integrated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZIM Integrated Shipping has no effect on the direction of Norsk Hydro i.e., Norsk Hydro and ZIM Integrated go up and down completely randomly.
Pair Corralation between Norsk Hydro and ZIM Integrated
Assuming the 90 days trading horizon Norsk Hydro ASA is expected to under-perform the ZIM Integrated. But the stock apears to be less risky and, when comparing its historical volatility, Norsk Hydro ASA is 2.04 times less risky than ZIM Integrated. The stock trades about -0.06 of its potential returns per unit of risk. The ZIM Integrated Shipping is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,506 in ZIM Integrated Shipping on October 4, 2024 and sell it today you would earn a total of 563.00 from holding ZIM Integrated Shipping or generate 37.38% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Norsk Hydro ASA vs. ZIM Integrated Shipping
Performance |
Timeline |
Norsk Hydro ASA |
ZIM Integrated Shipping |
Norsk Hydro and ZIM Integrated Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Norsk Hydro and ZIM Integrated
The main advantage of trading using opposite Norsk Hydro and ZIM Integrated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norsk Hydro position performs unexpectedly, ZIM Integrated 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 ZIM Integrated will offset losses from the drop in ZIM Integrated's long position.Norsk Hydro vs. PT Ace Hardware | Norsk Hydro vs. Salesforce | Norsk Hydro vs. FANDIFI TECHNOLOGY P | Norsk Hydro vs. AECOM TECHNOLOGY |
ZIM Integrated vs. CVB Financial Corp | ZIM Integrated vs. EAGLE MATERIALS | ZIM Integrated vs. Goodyear Tire Rubber | ZIM Integrated vs. THRACE PLASTICS |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Stocks Directory Find actively traded stocks across global markets | |
Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
Equity Valuation Check real value of public entities based on technical and fundamental data | |
ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |