Correlation Between Nordic Technology and Grong Sparebank
Can any of the company-specific risk be diversified away by investing in both Nordic Technology and Grong Sparebank 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 Grong Sparebank 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 Grong Sparebank, you can compare the effects of market volatilities on Nordic Technology and Grong Sparebank 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 Grong Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Technology and Grong Sparebank.
Diversification Opportunities for Nordic Technology and Grong Sparebank
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Nordic and Grong is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Technology Group and Grong Sparebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grong Sparebank 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 Grong Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grong Sparebank has no effect on the direction of Nordic Technology i.e., Nordic Technology and Grong Sparebank go up and down completely randomly.
Pair Corralation between Nordic Technology and Grong Sparebank
Assuming the 90 days trading horizon Nordic Technology Group is expected to generate 15.4 times more return on investment than Grong Sparebank. However, Nordic Technology is 15.4 times more volatile than Grong Sparebank. It trades about 0.04 of its potential returns per unit of risk. Grong Sparebank is currently generating about 0.08 per unit of risk. If you would invest 190.00 in Nordic Technology Group on December 29, 2024 and sell it today you would lose (21.00) from holding Nordic Technology Group or give up 11.05% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Nordic Technology Group vs. Grong Sparebank
Performance |
Timeline |
Nordic Technology |
Grong Sparebank |
Nordic Technology and Grong Sparebank Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nordic Technology and Grong Sparebank
The main advantage of trading using opposite Nordic Technology and Grong Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Technology position performs unexpectedly, Grong Sparebank 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 Grong Sparebank will offset losses from the drop in Grong Sparebank's long position.Nordic Technology vs. Nordic Semiconductor ASA | Nordic Technology vs. River Tech plc | Nordic Technology vs. Austevoll Seafood ASA | Nordic Technology vs. 5Th Planet Games |
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Check out your portfolio center.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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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