Correlation Between Olav Thon and NRC Group
Can any of the company-specific risk be diversified away by investing in both Olav Thon and NRC Group 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 Olav Thon and NRC Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Olav Thon Eien and NRC Group ASA, you can compare the effects of market volatilities on Olav Thon and NRC Group 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 Olav Thon with a short position of NRC Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Olav Thon and NRC Group.
Diversification Opportunities for Olav Thon and NRC Group
Very good diversification
The 3 months correlation between Olav and NRC is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Olav Thon Eien and NRC Group ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NRC Group ASA and Olav Thon 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 Olav Thon Eien are associated (or correlated) with NRC Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NRC Group ASA has no effect on the direction of Olav Thon i.e., Olav Thon and NRC Group go up and down completely randomly.
Pair Corralation between Olav Thon and NRC Group
Assuming the 90 days trading horizon Olav Thon is expected to generate 30.2 times less return on investment than NRC Group. But when comparing it to its historical volatility, Olav Thon Eien is 4.88 times less risky than NRC Group. It trades about 0.02 of its potential returns per unit of risk. NRC Group ASA is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 374.00 in NRC Group ASA on September 25, 2024 and sell it today you would earn a total of 122.00 from holding NRC Group ASA or generate 32.62% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Olav Thon Eien vs. NRC Group ASA
Performance |
Timeline |
Olav Thon Eien |
NRC Group ASA |
Olav Thon and NRC Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Olav Thon and NRC Group
The main advantage of trading using opposite Olav Thon and NRC Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Olav Thon position performs unexpectedly, NRC Group 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 NRC Group will offset losses from the drop in NRC Group's long position.Olav Thon vs. Gjensidige Forsikring ASA | Olav Thon vs. Storebrand ASA | Olav Thon vs. DnB ASA | Olav Thon vs. Veidekke ASA |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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