Correlation Between ODIN NORSK and ARCTIC HIGH

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

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

Diversification Opportunities for ODIN NORSK and ARCTIC HIGH

0.98

Correlation Coefficient

ODIN NORSK  ARCTIC HIGH

Almost no diversification

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

Pair Corralation between ODIN NORSK and ARCTIC HIGH

Assuming the 90 days trading horizon ODIN NORSK is expected to generate 1.64 times less return on investment than ARCTIC HIGH. But when comparing it to its historical volatility, ODIN NORSK OBLIGASJON is 6.9 times less risky than ARCTIC HIGH. It trades about 0.97 of its potential returns per unit of risk. ARCTIC HIGH RETURN is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  200,190  in ARCTIC HIGH RETURN on September 18, 2024 and sell it today you would earn a total of  3,707  from holding ARCTIC HIGH RETURN or generate 1.85% return on investment over 90 days.

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

ODIN NORSK OBLIGASJON  vs.  ARCTIC HIGH RETURN

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 current stock price disturbance, may contribute to short-term losses for the investors.

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 latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with ODIN NORSK and ARCTIC HIGH

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

The idea behind ODIN NORSK OBLIGASJON and ARCTIC HIGH RETURN 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.