Correlation Between Norion Bank and Upsales Technology

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

By analyzing existing cross correlation between Norion Bank and Upsales Technology AB, you can compare the effects of market volatilities on Norion Bank and Upsales Technology 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 Norion Bank with a short position of Upsales Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norion Bank and Upsales Technology.

Diversification Opportunities for Norion Bank and Upsales Technology

0.47

Correlation Coefficient

Norion Bank  Upsales Technology

Very weak diversification

The 3 months correlation between Norion and Upsales is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Norion Bank and Upsales Technology AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Upsales Technology and Norion Bank 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 Norion Bank are associated (or correlated) with Upsales Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Upsales Technology has no effect on the direction of Norion Bank i.e., Norion Bank and Upsales Technology go up and down completely randomly.

Pair Corralation between Norion Bank and Upsales Technology

Assuming the 90 days trading horizon Norion Bank is expected to under-perform the Upsales Technology. But the stock apears to be less risky and, when comparing its historical volatility, Norion Bank is 1.45 times less risky than Upsales Technology. The stock trades about -0.13 of its potential returns per unit of risk. The Upsales Technology AB is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  3,300  in Upsales Technology AB on September 3, 2024 and sell it today you would lose (140.00) from holding Upsales Technology AB or give up 4.24% of portfolio value over 90 days.

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

Norion Bank  vs.  Upsales Technology AB

Norion Bank

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Norion Bank has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Norion Bank is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Upsales Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Upsales Technology AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Norion Bank and Upsales Technology

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

The idea behind Norion Bank and Upsales Technology AB 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.