Correlation Between Nordic Iron and OMX Stockholm
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By analyzing existing cross correlation between Nordic Iron Ore and OMX Stockholm Mid, you can compare the effects of market volatilities on Nordic Iron and OMX Stockholm 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 Nordic Iron with a short position of OMX Stockholm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Iron and OMX Stockholm.
Diversification Opportunities for Nordic Iron and OMX Stockholm
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nordic and OMX is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Iron Ore and OMX Stockholm Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OMX Stockholm Mid and Nordic Iron 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 Nordic Iron Ore are associated (or correlated) with OMX Stockholm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OMX Stockholm Mid has no effect on the direction of Nordic Iron i.e., Nordic Iron and OMX Stockholm go up and down completely randomly.
Pair Corralation between Nordic Iron and OMX Stockholm
Assuming the 90 days trading horizon Nordic Iron is expected to generate 2.69 times less return on investment than OMX Stockholm. In addition to that, Nordic Iron is 3.88 times more volatile than OMX Stockholm Mid. It trades about 0.04 of its total potential returns per unit of risk. OMX Stockholm Mid is currently generating about 0.43 per unit of volatility. If you would invest 149,841 in OMX Stockholm Mid on February 17, 2024 and sell it today you would earn a total of 12,402 from holding OMX Stockholm Mid or generate 8.28% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Nordic Iron Ore vs. OMX Stockholm Mid
Performance |
Timeline |
Nordic Iron and OMX Stockholm Volatility Contrast
Predicted Return Density |
Returns |
Nordic Iron Ore
Pair trading matchups for Nordic Iron
OMX Stockholm Mid
Pair trading matchups for OMX Stockholm
Pair Trading with Nordic Iron and OMX Stockholm
The main advantage of trading using opposite Nordic Iron and OMX Stockholm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Iron position performs unexpectedly, OMX Stockholm 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 OMX Stockholm will offset losses from the drop in OMX Stockholm's long position.Nordic Iron vs. Leading Edge Materials | Nordic Iron vs. Kopy Goldfields publ | Nordic Iron vs. Alzinova AB | Nordic Iron vs. SaltX Technology Holding |
OMX Stockholm vs. OMX Stockholm Large | OMX Stockholm vs. OMX Stockholm GI | OMX Stockholm vs. OMX Nordic 40 | OMX Stockholm vs. OMX Stockholm Small |
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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