Correlation Between Maven Wireless and New Nordic

Can any of the company-specific risk be diversified away by investing in both Maven Wireless and New Nordic 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 Maven Wireless and New Nordic into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Maven Wireless Sweden and New Nordic Healthbrands, you can compare the effects of market volatilities on Maven Wireless and New Nordic 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 Maven Wireless with a short position of New Nordic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maven Wireless and New Nordic.

Diversification Opportunities for Maven Wireless and New Nordic

0.54

Correlation Coefficient

Maven Wireless  New Nordic

Very weak diversification

The 3 months correlation between Maven and New is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Maven Wireless Sweden and New Nordic Healthbrands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Nordic Healthbrands and Maven Wireless 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 Maven Wireless Sweden are associated (or correlated) with New Nordic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Nordic Healthbrands has no effect on the direction of Maven Wireless i.e., Maven Wireless and New Nordic go up and down completely randomly.

Pair Corralation between Maven Wireless and New Nordic

Assuming the 90 days trading horizon Maven Wireless Sweden is expected to under-perform the New Nordic. In addition to that, Maven Wireless is 1.12 times more volatile than New Nordic Healthbrands. It trades about -0.14 of its total potential returns per unit of risk. New Nordic Healthbrands is currently generating about -0.06 per unit of volatility. If you would invest  1,700  in New Nordic Healthbrands on September 13, 2024 and sell it today you would lose (200.00) from holding New Nordic Healthbrands or give up 11.76% of portfolio value over 90 days.

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

Maven Wireless Sweden  vs.  New Nordic Healthbrands

Maven Wireless Sweden

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Maven Wireless Sweden has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

New Nordic Healthbrands

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Maven Wireless and New Nordic

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

The idea behind Maven Wireless Sweden and New Nordic Healthbrands 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.

Check out your portfolio center.

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.