Correlation Between Qleanair Holding and Norion Bank

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

By analyzing existing cross correlation between Qleanair Holding AB and Norion Bank, you can compare the effects of market volatilities on Qleanair Holding and Norion Bank 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 Qleanair Holding with a short position of Norion Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qleanair Holding and Norion Bank.

Diversification Opportunities for Qleanair Holding and Norion Bank

-0.27

Correlation Coefficient

Qleanair Holding  Norion Bank

Very good diversification

The 3 months correlation between Qleanair and Norion is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Qleanair Holding AB and Norion Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Norion Bank and Qleanair Holding 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 Qleanair Holding AB are associated (or correlated) with Norion Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Norion Bank has no effect on the direction of Qleanair Holding i.e., Qleanair Holding and Norion Bank go up and down completely randomly.

Pair Corralation between Qleanair Holding and Norion Bank

Assuming the 90 days trading horizon Qleanair Holding AB is expected to under-perform the Norion Bank. But the stock apears to be less risky and, when comparing its historical volatility, Qleanair Holding AB is 1.02 times less risky than Norion Bank. The stock trades about -0.08 of its potential returns per unit of risk. The Norion Bank is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  3,760  in Norion Bank on November 27, 2024 and sell it today you would earn a total of  345.00  from holding Norion Bank or generate 9.18% return on investment over 90 days.

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

Qleanair Holding AB  vs.  Norion Bank

Qleanair Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days Qleanair Holding AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak 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.

Norion Bank

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Norion Bank are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Norion Bank may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with Qleanair Holding and Norion Bank

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

The idea behind Qleanair Holding AB and Norion Bank 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.