Correlation Between AcadeMedia and Nordic Iron

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

By analyzing existing cross correlation between AcadeMedia AB and Nordic Iron Ore, you can compare the effects of market volatilities on AcadeMedia and Nordic Iron 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 AcadeMedia with a short position of Nordic Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of AcadeMedia and Nordic Iron.

Diversification Opportunities for AcadeMedia and Nordic Iron

-0.4

Correlation Coefficient

AcadeMedia  Nordic Iron

Very good diversification

The 3 months correlation between AcadeMedia and Nordic is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding AcadeMedia AB and Nordic Iron Ore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordic Iron Ore and AcadeMedia 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 AcadeMedia AB are associated (or correlated) with Nordic Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordic Iron Ore has no effect on the direction of AcadeMedia i.e., AcadeMedia and Nordic Iron go up and down completely randomly.

Pair Corralation between AcadeMedia and Nordic Iron

Assuming the 90 days trading horizon AcadeMedia AB is expected to generate 0.44 times more return on investment than Nordic Iron. However, AcadeMedia AB is 2.28 times less risky than Nordic Iron. It trades about 0.1 of its potential returns per unit of risk. Nordic Iron Ore is currently generating about -0.05 per unit of risk. If you would invest  8,030  in AcadeMedia AB on April 24, 2025 and sell it today you would earn a total of  970.00  from holding AcadeMedia AB or generate 12.08% return on investment over 90 days.

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

AcadeMedia AB  vs.  Nordic Iron Ore

AcadeMedia AB

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in AcadeMedia AB are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, AcadeMedia unveiled solid returns over the last few months and may actually be approaching a breakup point.

Nordic Iron Ore

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nordic Iron Ore has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in August 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with AcadeMedia and Nordic Iron

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

The idea behind AcadeMedia AB and Nordic Iron Ore 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.