Correlation Between Goff Corp and Nel ASA

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

By analyzing existing cross correlation between Goff Corp and Nel ASA, you can compare the effects of market volatilities on Goff Corp and Nel ASA 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 Goff Corp with a short position of Nel ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goff Corp and Nel ASA.

Diversification Opportunities for Goff Corp and Nel ASA

0.77

Correlation Coefficient

Goff Corp  Nel ASA

Poor diversification

The 3 months correlation between Goff and Nel is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Goff Corp and Nel ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nel ASA and Goff Corp 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 Goff Corp are associated (or correlated) with Nel ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nel ASA has no effect on the direction of Goff Corp i.e., Goff Corp and Nel ASA go up and down completely randomly.

Pair Corralation between Goff Corp and Nel ASA

Given the investment horizon of 90 days Goff Corp is expected to generate 2.77 times more return on investment than Nel ASA. However, Goff Corp is 2.77 times more volatile than Nel ASA. It trades about 0.0 of its potential returns per unit of risk. Nel ASA is currently generating about -0.16 per unit of risk. If you would invest  1.50  in Goff Corp on September 3, 2024 and sell it today you would lose (0.63) from holding Goff Corp or give up 42.0% of portfolio value over 90 days.

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

Goff Corp  vs.  Nel ASA

Goff Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Goff Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Goff Corp is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Nel ASA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nel ASA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Goff Corp and Nel ASA

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

The idea behind Goff Corp and Nel ASA 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.