Correlation Between Nordic Technology and Belships

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

Diversification Opportunities for Nordic Technology and Belships

-0.3

Correlation Coefficient

Nordic Technology  Belships

Very good diversification

The 3 months correlation between Nordic and Belships is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Technology Group and Belships in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Belships 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 Belships. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Belships has no effect on the direction of Nordic Technology i.e., Nordic Technology and Belships go up and down completely randomly.

Pair Corralation between Nordic Technology and Belships

Assuming the 90 days trading horizon Nordic Technology Group is expected to under-perform the Belships. But the stock apears to be less risky and, when comparing its historical volatility, Nordic Technology Group is 1.88 times less risky than Belships. The stock trades about -0.24 of its potential returns per unit of risk. The Belships is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  1,668  in Belships on October 11, 2024 and sell it today you would earn a total of  342.00  from holding Belships or generate 20.5% return on investment over 90 days.

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

Nordic Technology Group  vs.  Belships

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 February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Belships

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Belships are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Belships may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Nordic Technology and Belships

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

The idea behind Nordic Technology Group and Belships 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.