Correlation Between NORDIC HALIBUT and Medibank Private

Can any of the company-specific risk be diversified away by investing in both NORDIC HALIBUT and Medibank Private 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 Medibank Private 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 Medibank Private Limited, you can compare the effects of market volatilities on NORDIC HALIBUT and Medibank Private 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 Medibank Private. Check out your portfolio center. Please also check ongoing floating volatility patterns of NORDIC HALIBUT and Medibank Private.

Diversification Opportunities for NORDIC HALIBUT and Medibank Private

-0.67

Correlation Coefficient

NORDIC HALIBUT  Medibank Private

Excellent diversification

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

Pair Corralation between NORDIC HALIBUT and Medibank Private

Assuming the 90 days horizon NORDIC HALIBUT AS is expected to under-perform the Medibank Private. In addition to that, NORDIC HALIBUT is 2.0 times more volatile than Medibank Private Limited. It trades about -0.19 of its total potential returns per unit of risk. Medibank Private Limited is currently generating about 0.02 per unit of volatility. If you would invest  222.00  in Medibank Private Limited on September 15, 2024 and sell it today you would earn a total of  2.00  from holding Medibank Private Limited or generate 0.9% return on investment over 90 days.

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

NORDIC HALIBUT AS  vs.  Medibank Private Limited

NORDIC HALIBUT AS

Risk-Adjusted Performance

0 of 100

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.

Medibank Private

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Medibank Private Limited are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Medibank Private is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with NORDIC HALIBUT and Medibank Private

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

The idea behind NORDIC HALIBUT AS and Medibank Private Limited 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.