Correlation Between Xplora Technologies and Nordic Technology

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

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

Diversification Opportunities for Xplora Technologies and Nordic Technology

-0.62

Correlation Coefficient

Xplora Technologies  Nordic Technology

Excellent diversification

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

Pair Corralation between Xplora Technologies and Nordic Technology

Assuming the 90 days trading horizon Xplora Technologies As is expected to generate 1.17 times more return on investment than Nordic Technology. However, Xplora Technologies is 1.17 times more volatile than Nordic Technology Group. It trades about 0.32 of its potential returns per unit of risk. Nordic Technology Group is currently generating about -0.17 per unit of risk. If you would invest  1,770  in Xplora Technologies As on September 14, 2024 and sell it today you would earn a total of  1,470  from holding Xplora Technologies As or generate 83.05% return on investment over 90 days.

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

Xplora Technologies As  vs.  Nordic Technology Group

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.

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.

Pair Trading with Xplora Technologies and Nordic Technology

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

The idea behind Xplora Technologies As and Nordic Technology Group 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..