Correlation Between Nordic Technology and Beerenberg

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

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

Diversification Opportunities for Nordic Technology and Beerenberg

-0.48

Correlation Coefficient

Nordic Technology  Beerenberg

Very good diversification

The 3 months correlation between Nordic and Beerenberg is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Technology Group and Beerenberg AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beerenberg AS and Nordic Technology 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 Technology Group 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 Technology i.e., Nordic Technology and Beerenberg go up and down completely randomly.

Pair Corralation between Nordic Technology and Beerenberg

Assuming the 90 days trading horizon Nordic Technology Group is expected to under-perform the Beerenberg. In addition to that, Nordic Technology is 3.94 times more volatile than Beerenberg AS. It trades about -0.15 of its total potential returns per unit of risk. Beerenberg AS is currently generating about 0.03 per unit of volatility. If you would invest  4,060  in Beerenberg AS on September 2, 2024 and sell it today you would earn a total of  40.00  from holding Beerenberg AS or generate 0.99% return on investment over 90 days.

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

Nordic Technology Group  vs.  Beerenberg AS

Nordic Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nordic Technology Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company 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 Technology and Beerenberg

The main advantage of trading using opposite Nordic Technology and Beerenberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Technology 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 Technology Group 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.