Correlation Between Nordic Mining and Beerenberg

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

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

Diversification Opportunities for Nordic Mining and Beerenberg

-0.22

Correlation Coefficient

Nordic Mining  Beerenberg

Very good diversification

The 3 months correlation between Nordic and Beerenberg is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Mining ASA and Beerenberg AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beerenberg AS and Nordic Mining 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 Mining ASA are associated (or correlated) with Beerenberg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beerenberg AS has no effect on the direction of Nordic Mining i.e., Nordic Mining and Beerenberg go up and down completely randomly.

Pair Corralation between Nordic Mining and Beerenberg

Assuming the 90 days trading horizon Nordic Mining ASA is expected to generate 3.04 times more return on investment than Beerenberg. However, Nordic Mining is 3.04 times more volatile than Beerenberg AS. It trades about 0.02 of its potential returns per unit of risk. Beerenberg AS is currently generating about 0.03 per unit of risk. If you would invest  2,510  in Nordic Mining ASA on September 2, 2024 and sell it today you would earn a total of  31.00  from holding Nordic Mining ASA or generate 1.24% return on investment over 90 days.

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

Nordic Mining ASA  vs.  Beerenberg AS

Nordic Mining ASA

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nordic Mining ASA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent primary indicators, Nordic Mining is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Beerenberg AS

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Beerenberg AS are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Beerenberg is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Nordic Mining and Beerenberg

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

The idea behind Nordic Mining ASA and Beerenberg AS 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.