Correlation Between Vow Green and Nordhealth

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

By analyzing existing cross correlation between Vow Green Metals and Nordhealth AS, you can compare the effects of market volatilities on Vow Green and Nordhealth 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 Vow Green with a short position of Nordhealth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vow Green and Nordhealth.

Diversification Opportunities for Vow Green and Nordhealth

-0.34

Correlation Coefficient

Vow Green  Nordhealth

Very good diversification

The 3 months correlation between Vow and Nordhealth is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Vow Green Metals and Nordhealth AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordhealth AS and Vow Green 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 Vow Green Metals are associated (or correlated) with Nordhealth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordhealth AS has no effect on the direction of Vow Green i.e., Vow Green and Nordhealth go up and down completely randomly.

Pair Corralation between Vow Green and Nordhealth

Assuming the 90 days trading horizon Vow Green is expected to generate 1.18 times less return on investment than Nordhealth. In addition to that, Vow Green is 1.02 times more volatile than Nordhealth AS. It trades about 0.07 of its total potential returns per unit of risk. Nordhealth AS is currently generating about 0.08 per unit of volatility. If you would invest  3,430  in Nordhealth AS on September 13, 2024 and sell it today you would earn a total of  670.00  from holding Nordhealth AS or generate 19.53% return on investment over 90 days.

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

Vow Green Metals  vs.  Nordhealth AS

Vow Green Metals

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Vow Green Metals are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting primary indicators, Vow Green disclosed solid returns over the last few months and may actually be approaching a breakup point.

Nordhealth AS

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Nordhealth AS are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Nordhealth displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vow Green and Nordhealth

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

The idea behind Vow Green Metals and Nordhealth 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..