Correlation Between Nordic Mining and Napatech

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

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

Diversification Opportunities for Nordic Mining and Napatech

0.78

Correlation Coefficient

Nordic Mining  Napatech

Poor diversification

The 3 months correlation between Nordic and Napatech is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Mining ASA and Napatech AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Napatech AS and Nordic Mining 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 Mining ASA are associated (or correlated) with Napatech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Napatech AS has no effect on the direction of Nordic Mining i.e., Nordic Mining and Napatech go up and down completely randomly.

Pair Corralation between Nordic Mining and Napatech

Assuming the 90 days trading horizon Nordic Mining is expected to generate 1.75 times less return on investment than Napatech. But when comparing it to its historical volatility, Nordic Mining ASA is 1.11 times less risky than Napatech. It trades about 0.11 of its potential returns per unit of risk. Napatech AS is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  1,900  in Napatech AS on April 24, 2025 and sell it today you would earn a total of  625.00  from holding Napatech AS or generate 32.89% return on investment over 90 days.

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

Nordic Mining ASA  vs.  Napatech AS

Nordic Mining ASA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nordic Mining ASA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting primary indicators, Nordic Mining disclosed solid returns over the last few months and may actually be approaching a breakup point.

Napatech AS

Risk-Adjusted Performance

Good

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

Pair Trading with Nordic Mining and Napatech

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

The idea behind Nordic Mining ASA and Napatech AS 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.