Correlation Between Nordic Asia and Indutrade

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

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

Diversification Opportunities for Nordic Asia and Indutrade

0.36

Correlation Coefficient

Nordic Asia  Indutrade

Weak diversification

The 3 months correlation between Nordic and Indutrade is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Asia Investment and Indutrade AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indutrade AB and Nordic Asia 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 Asia Investment are associated (or correlated) with Indutrade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indutrade AB has no effect on the direction of Nordic Asia i.e., Nordic Asia and Indutrade go up and down completely randomly.

Pair Corralation between Nordic Asia and Indutrade

Assuming the 90 days trading horizon Nordic Asia Investment is expected to under-perform the Indutrade. In addition to that, Nordic Asia is 4.53 times more volatile than Indutrade AB. It trades about -0.11 of its total potential returns per unit of risk. Indutrade AB is currently generating about -0.05 per unit of volatility. If you would invest  25,620  in Indutrade AB on April 25, 2025 and sell it today you would lose (1,420) from holding Indutrade AB or give up 5.54% of portfolio value over 90 days.

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

Nordic Asia Investment  vs.  Indutrade AB

Nordic Asia Investment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nordic Asia Investment has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's forward indicators remain somewhat strong which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Indutrade AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Indutrade AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Indutrade is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Nordic Asia and Indutrade

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

The idea behind Nordic Asia Investment and Indutrade AB 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 Directory module to find actively traded commodities issued by global exchanges.