Correlation Between Mountain Crest and Norsk Hydro
Can any of the company-specific risk be diversified away by investing in both Mountain Crest and Norsk Hydro 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 Mountain Crest and Norsk Hydro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mountain Crest Acquisition and Norsk Hydro ASA, you can compare the effects of market volatilities on Mountain Crest and Norsk Hydro 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 Mountain Crest with a short position of Norsk Hydro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mountain Crest and Norsk Hydro.
Diversification Opportunities for Mountain Crest and Norsk Hydro
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mountain and Norsk is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Mountain Crest Acquisition and Norsk Hydro ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Norsk Hydro ASA and Mountain Crest 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 Mountain Crest Acquisition are associated (or correlated) with Norsk Hydro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Norsk Hydro ASA has no effect on the direction of Mountain Crest i.e., Mountain Crest and Norsk Hydro go up and down completely randomly.
Pair Corralation between Mountain Crest and Norsk Hydro
If you would invest 621.00 in Norsk Hydro ASA on February 23, 2024 and sell it today you would earn a total of 42.00 from holding Norsk Hydro ASA or generate 6.76% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 0.0% |
Values | Daily Returns |
Mountain Crest Acquisition vs. Norsk Hydro ASA
Performance |
Timeline |
Mountain Crest Acqui |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Norsk Hydro ASA |
Mountain Crest and Norsk Hydro Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mountain Crest and Norsk Hydro
The main advantage of trading using opposite Mountain Crest and Norsk Hydro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mountain Crest position performs unexpectedly, Norsk Hydro 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 Norsk Hydro will offset losses from the drop in Norsk Hydro's long position.Mountain Crest vs. Rand Capital Corp | Mountain Crest vs. Sabra Healthcare REIT | Mountain Crest vs. Herc Holdings | Mountain Crest vs. Lend Lease Group |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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