Correlation Between Nordic Technology and Lery Seafood

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

Diversification Opportunities for Nordic Technology and Lery Seafood

-0.67

Correlation Coefficient

Nordic Technology  Lery Seafood

Excellent diversification

The 3 months correlation between Nordic and Lery is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Technology Group and Lery Seafood Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lery Seafood Group 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 Lery Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lery Seafood Group has no effect on the direction of Nordic Technology i.e., Nordic Technology and Lery Seafood go up and down completely randomly.

Pair Corralation between Nordic Technology and Lery Seafood

Assuming the 90 days trading horizon Nordic Technology Group is expected to generate 9.77 times more return on investment than Lery Seafood. However, Nordic Technology is 9.77 times more volatile than Lery Seafood Group. It trades about 0.04 of its potential returns per unit of risk. Lery Seafood Group is currently generating about 0.0 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 Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Nordic Technology Group  vs.  Lery Seafood Group

Nordic Technology

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nordic Technology Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting technical and fundamental indicators, Nordic Technology disclosed solid returns over the last few months and may actually be approaching a breakup point.

Lery Seafood Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lery Seafood Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, Lery Seafood is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Nordic Technology and Lery Seafood

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

The idea behind Nordic Technology Group and Lery Seafood Group 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.