Correlation Between AutoStore Holdings and Norsk Hydro

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

By analyzing existing cross correlation between AutoStore Holdings and Norsk Hydro ASA, you can compare the effects of market volatilities on AutoStore Holdings 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 AutoStore Holdings with a short position of Norsk Hydro. Check out your portfolio center. Please also check ongoing floating volatility patterns of AutoStore Holdings and Norsk Hydro.

Diversification Opportunities for AutoStore Holdings and Norsk Hydro

0.18

Correlation Coefficient

AutoStore Holdings  Norsk Hydro

Average diversification

The 3 months correlation between AutoStore and Norsk is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding AutoStore Holdings 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 AutoStore Holdings 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 AutoStore Holdings 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 AutoStore Holdings i.e., AutoStore Holdings and Norsk Hydro go up and down completely randomly.

Pair Corralation between AutoStore Holdings and Norsk Hydro

Assuming the 90 days trading horizon AutoStore Holdings is expected to generate 2.86 times more return on investment than Norsk Hydro. However, AutoStore Holdings is 2.86 times more volatile than Norsk Hydro ASA. It trades about 0.45 of its potential returns per unit of risk. Norsk Hydro ASA is currently generating about 0.43 per unit of risk. If you would invest  533.00  in AutoStore Holdings on April 22, 2025 and sell it today you would earn a total of  182.00  from holding AutoStore Holdings or generate 34.15% return on investment over 90 days.

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

AutoStore Holdings  vs.  Norsk Hydro ASA

AutoStore Holdings

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AutoStore Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite weak essential indicators, AutoStore Holdings may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Norsk Hydro ASA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Norsk Hydro ASA are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Norsk Hydro disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AutoStore Holdings and Norsk Hydro

The main advantage of trading using opposite AutoStore Holdings and Norsk Hydro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AutoStore Holdings 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.

The idea behind AutoStore Holdings and Norsk Hydro ASA 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.