Correlation Between Nordic Technology and Xplora Technologies

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

By analyzing existing cross correlation between Nordic Technology Group and Xplora Technologies As, you can compare the effects of market volatilities on Nordic Technology and Xplora Technologies 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 Technology with a short position of Xplora Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Technology and Xplora Technologies.

Diversification Opportunities for Nordic Technology and Xplora Technologies

-0.62

Correlation Coefficient

Nordic Technology  Xplora Technologies

Excellent diversification

The 3 months correlation between Nordic and Xplora is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Technology Group and Xplora Technologies As in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xplora Technologies and Nordic Technology 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 Technology Group are associated (or correlated) with Xplora Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xplora Technologies has no effect on the direction of Nordic Technology i.e., Nordic Technology and Xplora Technologies go up and down completely randomly.

Pair Corralation between Nordic Technology and Xplora Technologies

Assuming the 90 days trading horizon Nordic Technology Group is expected to under-perform the Xplora Technologies. In addition to that, Nordic Technology is 1.41 times more volatile than Xplora Technologies As. It trades about -0.02 of its total potential returns per unit of risk. Xplora Technologies As is currently generating about 0.08 per unit of volatility. If you would invest  990.00  in Xplora Technologies As on September 14, 2024 and sell it today you would earn a total of  2,250  from holding Xplora Technologies As or generate 227.27% return on investment over 90 days.

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

Nordic Technology Group  vs.  Xplora Technologies As

Nordic Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nordic Technology Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Xplora Technologies

Risk-Adjusted Performance

25 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Xplora Technologies As are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Xplora Technologies displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nordic Technology and Xplora Technologies

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

The idea behind Nordic Technology Group and Xplora Technologies As 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.