Correlation Between ARCTIC HIGH and ODIN NORSK

Can any of the company-specific risk be diversified away by investing in both ARCTIC HIGH and ODIN NORSK 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 ARCTIC HIGH and ODIN NORSK into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ARCTIC HIGH RETURN and ODIN NORSK OBLIGASJON, you can compare the effects of market volatilities on ARCTIC HIGH and ODIN NORSK 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 ARCTIC HIGH with a short position of ODIN NORSK. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARCTIC HIGH and ODIN NORSK.

Diversification Opportunities for ARCTIC HIGH and ODIN NORSK

0.98

Correlation Coefficient

ARCTIC HIGH  ODIN NORSK

Almost no diversification

The 3 months correlation between ARCTIC and ODIN is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding ARCTIC HIGH RETURN and ODIN NORSK OBLIGASJON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ODIN NORSK OBLIGASJON and ARCTIC HIGH 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 ARCTIC HIGH RETURN are associated (or correlated) with ODIN NORSK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ODIN NORSK OBLIGASJON has no effect on the direction of ARCTIC HIGH i.e., ARCTIC HIGH and ODIN NORSK go up and down completely randomly.

Pair Corralation between ARCTIC HIGH and ODIN NORSK

Assuming the 90 days trading horizon ARCTIC HIGH RETURN is expected to generate 7.01 times more return on investment than ODIN NORSK. However, ARCTIC HIGH is 7.01 times more volatile than ODIN NORSK OBLIGASJON. It trades about 0.24 of its potential returns per unit of risk. ODIN NORSK OBLIGASJON is currently generating about 0.97 per unit of risk. If you would invest  199,760  in ARCTIC HIGH RETURN on September 17, 2024 and sell it today you would earn a total of  3,829  from holding ARCTIC HIGH RETURN or generate 1.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

ARCTIC HIGH RETURN  vs.  ODIN NORSK OBLIGASJON

ARCTIC HIGH RETURN

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ARCTIC HIGH RETURN are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly stable basic indicators, ARCTIC HIGH is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

ODIN NORSK OBLIGASJON

Risk-Adjusted Performance

76 of 100

Market Crasher

Compared to the overall equity markets, risk-adjusted returns on investments in ODIN NORSK OBLIGASJON are ranked lower than 76 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong basic indicators, ODIN NORSK is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ARCTIC HIGH and ODIN NORSK

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

The idea behind ARCTIC HIGH RETURN and ODIN NORSK OBLIGASJON 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.