Correlation Between NORDIC HALIBUT and GUOTAI JUNAN

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Can any of the company-specific risk be diversified away by investing in both NORDIC HALIBUT and GUOTAI JUNAN 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 HALIBUT and GUOTAI JUNAN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NORDIC HALIBUT AS and GUOTAI JUNAN SEC, you can compare the effects of market volatilities on NORDIC HALIBUT and GUOTAI JUNAN 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 HALIBUT with a short position of GUOTAI JUNAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of NORDIC HALIBUT and GUOTAI JUNAN.

Diversification Opportunities for NORDIC HALIBUT and GUOTAI JUNAN

-0.6
  Correlation Coefficient

Excellent diversification

The 3 months correlation between NORDIC and GUOTAI is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding NORDIC HALIBUT AS and GUOTAI JUNAN SEC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GUOTAI JUNAN SEC and NORDIC HALIBUT 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 HALIBUT AS are associated (or correlated) with GUOTAI JUNAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GUOTAI JUNAN SEC has no effect on the direction of NORDIC HALIBUT i.e., NORDIC HALIBUT and GUOTAI JUNAN go up and down completely randomly.

Pair Corralation between NORDIC HALIBUT and GUOTAI JUNAN

Assuming the 90 days horizon NORDIC HALIBUT AS is expected to under-perform the GUOTAI JUNAN. In addition to that, NORDIC HALIBUT is 1.5 times more volatile than GUOTAI JUNAN SEC. It trades about -0.32 of its total potential returns per unit of risk. GUOTAI JUNAN SEC is currently generating about 0.04 per unit of volatility. If you would invest  140.00  in GUOTAI JUNAN SEC on September 15, 2024 and sell it today you would earn a total of  2.00  from holding GUOTAI JUNAN SEC or generate 1.43% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy95.65%
ValuesDaily Returns

NORDIC HALIBUT AS  vs.  GUOTAI JUNAN SEC

 Performance 
       Timeline  
NORDIC HALIBUT AS 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days NORDIC HALIBUT AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
GUOTAI JUNAN SEC 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in GUOTAI JUNAN SEC are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, GUOTAI JUNAN reported solid returns over the last few months and may actually be approaching a breakup point.

NORDIC HALIBUT and GUOTAI JUNAN Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with NORDIC HALIBUT and GUOTAI JUNAN

The main advantage of trading using opposite NORDIC HALIBUT and GUOTAI JUNAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NORDIC HALIBUT position performs unexpectedly, GUOTAI JUNAN 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 GUOTAI JUNAN will offset losses from the drop in GUOTAI JUNAN's long position.
The idea behind NORDIC HALIBUT AS and GUOTAI JUNAN SEC 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.

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