Correlation Between Nordhealth and Elmera Group

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

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

Diversification Opportunities for Nordhealth and Elmera Group

0.0

Correlation Coefficient

Nordhealth  Elmera Group

Pay attention - limited upside

The 3 months correlation between Nordhealth and Elmera is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nordhealth AS and Elmera Group ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elmera Group ASA and Nordhealth 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 Nordhealth AS are associated (or correlated) with Elmera Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elmera Group ASA has no effect on the direction of Nordhealth i.e., Nordhealth and Elmera Group go up and down completely randomly.

Pair Corralation between Nordhealth and Elmera Group

If you would invest  3,690  in Nordhealth AS on October 25, 2024 and sell it today you would earn a total of  400.00  from holding Nordhealth AS or generate 10.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.69%
Values	Daily Returns

Nordhealth AS  vs.  Elmera Group ASA

Nordhealth AS

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nordhealth AS are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Nordhealth displayed solid returns over the last few months and may actually be approaching a breakup point.

Elmera Group ASA

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Elmera Group ASA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Elmera Group is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Nordhealth and Elmera Group

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

The idea behind Nordhealth AS and Elmera Group ASA 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.