Correlation Between Yara International and NRC Group
Can any of the company-specific risk be diversified away by investing in both Yara International 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 Yara International and NRC Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yara International ASA and NRC Group ASA, you can compare the effects of market volatilities on Yara International 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 Yara International with a short position of NRC Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yara International and NRC Group.
Diversification Opportunities for Yara International and NRC Group
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Yara and NRC is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Yara International ASA 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 Yara International 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 Yara International ASA 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 Yara International i.e., Yara International and NRC Group go up and down completely randomly.
Pair Corralation between Yara International and NRC Group
Assuming the 90 days trading horizon Yara International ASA is expected to under-perform the NRC Group. But the stock apears to be less risky and, when comparing its historical volatility, Yara International ASA is 3.5 times less risky than NRC Group. The stock trades about -0.22 of its potential returns per unit of risk. The NRC Group ASA is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 390.00 in NRC Group ASA on September 25, 2024 and sell it today you would earn a total of 106.00 from holding NRC Group ASA or generate 27.18% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 95.45% |
Values | Daily Returns |
Yara International ASA vs. NRC Group ASA
Performance |
Timeline |
Yara International ASA |
NRC Group ASA |
Yara International and NRC Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Yara International and NRC Group
The main advantage of trading using opposite Yara International and NRC Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yara International 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.Yara International vs. Telenor ASA | Yara International vs. Orkla ASA | Yara International vs. DnB ASA | Yara International vs. Storebrand 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |