Correlation Between Nordic Aqua and 2020 Bulkers

Can any of the company-specific risk be diversified away by investing in both Nordic Aqua and 2020 Bulkers 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 Aqua and 2020 Bulkers into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nordic Aqua Partners and 2020 Bulkers, you can compare the effects of market volatilities on Nordic Aqua and 2020 Bulkers 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 Aqua with a short position of 2020 Bulkers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Aqua and 2020 Bulkers.

Diversification Opportunities for Nordic Aqua and 2020 Bulkers

-0.76

Correlation Coefficient

Nordic Aqua  2020 Bulkers

Pay attention - limited upside

The 3 months correlation between Nordic and 2020 is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Aqua Partners and 2020 Bulkers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 2020 Bulkers and Nordic Aqua 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 Aqua Partners are associated (or correlated) with 2020 Bulkers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 2020 Bulkers has no effect on the direction of Nordic Aqua i.e., Nordic Aqua and 2020 Bulkers go up and down completely randomly.

Pair Corralation between Nordic Aqua and 2020 Bulkers

Assuming the 90 days trading horizon Nordic Aqua Partners is expected to under-perform the 2020 Bulkers. But the stock apears to be less risky and, when comparing its historical volatility, Nordic Aqua Partners is 1.03 times less risky than 2020 Bulkers. The stock trades about -0.05 of its potential returns per unit of risk. The 2020 Bulkers is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  10,373  in 2020 Bulkers on April 24, 2025 and sell it today you would earn a total of  2,227  from holding 2020 Bulkers or generate 21.47% return on investment over 90 days.

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

Nordic Aqua Partners  vs.  2020 Bulkers

Nordic Aqua Partners

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nordic Aqua Partners has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, Nordic Aqua is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

2020 Bulkers

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in 2020 Bulkers are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting essential indicators, 2020 Bulkers disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nordic Aqua and 2020 Bulkers

The main advantage of trading using opposite Nordic Aqua and 2020 Bulkers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Aqua position performs unexpectedly, 2020 Bulkers 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 2020 Bulkers will offset losses from the drop in 2020 Bulkers' long position.

The idea behind Nordic Aqua Partners and 2020 Bulkers 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.