Correlation Between Norva24 Group and Polygiene

Can any of the company-specific risk be diversified away by investing in both Norva24 Group and Polygiene 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 Polygiene 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 Polygiene AB, you can compare the effects of market volatilities on Norva24 Group and Polygiene 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 Polygiene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norva24 Group and Polygiene.

Diversification Opportunities for Norva24 Group and Polygiene

-0.71

Correlation Coefficient

Norva24 Group  Polygiene

Pay attention - limited upside

The 3 months correlation between Norva24 and Polygiene is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Norva24 Group AB and Polygiene AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polygiene AB 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 Polygiene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polygiene AB has no effect on the direction of Norva24 Group i.e., Norva24 Group and Polygiene go up and down completely randomly.

Pair Corralation between Norva24 Group and Polygiene

Assuming the 90 days trading horizon Norva24 Group AB is expected to generate 2.7 times more return on investment than Polygiene. However, Norva24 Group is 2.7 times more volatile than Polygiene AB. It trades about 0.09 of its potential returns per unit of risk. Polygiene AB is currently generating about -0.17 per unit of risk. If you would invest  2,700  in Norva24 Group AB on December 26, 2024 and sell it today you would earn a total of  925.00  from holding Norva24 Group AB or generate 34.26% return on investment over 90 days.

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

Norva24 Group AB  vs.  Polygiene AB

Norva24 Group AB

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Norva24 Group AB are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Norva24 Group unveiled solid returns over the last few months and may actually be approaching a breakup point.

Polygiene AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Polygiene AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Norva24 Group and Polygiene

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

The idea behind Norva24 Group AB and Polygiene 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.