Correlation Between Norva24 Group and Arctic Gold

Can any of the company-specific risk be diversified away by investing in both Norva24 Group and Arctic Gold 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 Norva24 Group and Arctic Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Norva24 Group AB and Arctic Gold Publ, you can compare the effects of market volatilities on Norva24 Group and Arctic Gold 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 Norva24 Group with a short position of Arctic Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norva24 Group and Arctic Gold.

Diversification Opportunities for Norva24 Group and Arctic Gold

0.21

Correlation Coefficient

Norva24 Group  Arctic Gold

Modest diversification

The 3 months correlation between Norva24 and Arctic is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Norva24 Group AB and Arctic Gold Publ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arctic Gold Publ and Norva24 Group 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 Norva24 Group AB are associated (or correlated) with Arctic Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arctic Gold Publ has no effect on the direction of Norva24 Group i.e., Norva24 Group and Arctic Gold go up and down completely randomly.

Pair Corralation between Norva24 Group and Arctic Gold

Assuming the 90 days trading horizon Norva24 Group AB is expected to under-perform the Arctic Gold. But the stock apears to be less risky and, when comparing its historical volatility, Norva24 Group AB is 3.31 times less risky than Arctic Gold. The stock trades about -0.07 of its potential returns per unit of risk. The Arctic Gold Publ is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  23.00  in Arctic Gold Publ on September 12, 2024 and sell it today you would earn a total of  2.00  from holding Arctic Gold Publ or generate 8.7% return on investment over 90 days.

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

Norva24 Group AB  vs.  Arctic Gold Publ

Norva24 Group AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Norva24 Group AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Arctic Gold Publ

Risk-Adjusted Performance

4 of 100

Insignificant

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

Pair Trading with Norva24 Group and Arctic Gold

The main advantage of trading using opposite Norva24 Group and Arctic Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norva24 Group position performs unexpectedly, Arctic Gold 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 Arctic Gold will offset losses from the drop in Arctic Gold's long position.

The idea behind Norva24 Group AB and Arctic Gold Publ 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.