Correlation Between Online Brands and Nilsson Special

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

By analyzing existing cross correlation between Online Brands Nordic and Nilsson Special Vehicles, you can compare the effects of market volatilities on Online Brands and Nilsson Special 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 Online Brands with a short position of Nilsson Special. Check out your portfolio center. Please also check ongoing floating volatility patterns of Online Brands and Nilsson Special.

Diversification Opportunities for Online Brands and Nilsson Special

0.17

Correlation Coefficient

Online Brands  Nilsson Special

Average diversification

The 3 months correlation between Online and Nilsson is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Online Brands Nordic and Nilsson Special Vehicles in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nilsson Special Vehicles and Online Brands 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 Online Brands Nordic are associated (or correlated) with Nilsson Special. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nilsson Special Vehicles has no effect on the direction of Online Brands i.e., Online Brands and Nilsson Special go up and down completely randomly.

Pair Corralation between Online Brands and Nilsson Special

Assuming the 90 days trading horizon Online Brands Nordic is expected to under-perform the Nilsson Special. But the stock apears to be less risky and, when comparing its historical volatility, Online Brands Nordic is 2.94 times less risky than Nilsson Special. The stock trades about -0.06 of its potential returns per unit of risk. The Nilsson Special Vehicles is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  324.00  in Nilsson Special Vehicles on December 30, 2024 and sell it today you would lose (44.00) from holding Nilsson Special Vehicles or give up 13.58% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Online Brands Nordic  vs.  Nilsson Special Vehicles

Online Brands Nordic

Risk-Adjusted Performance

Very Weak

Over the last 90 days Online Brands Nordic has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Nilsson Special Vehicles

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nilsson Special Vehicles are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Nilsson Special may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Online Brands and Nilsson Special

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

The idea behind Online Brands Nordic and Nilsson Special Vehicles 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.