Correlation Between Photocat and Nordic Iron

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

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

Diversification Opportunities for Photocat and Nordic Iron

-0.9

Correlation Coefficient

Photocat  Nordic Iron

Pay attention - limited upside

The 3 months correlation between Photocat and Nordic is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Photocat AS 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 Photocat 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 Photocat AS 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 Photocat i.e., Photocat and Nordic Iron go up and down completely randomly.

Pair Corralation between Photocat and Nordic Iron

Assuming the 90 days trading horizon Photocat AS is expected to generate 0.29 times more return on investment than Nordic Iron. However, Photocat AS is 3.47 times less risky than Nordic Iron. It trades about 0.13 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  850.00  in Photocat AS on April 23, 2025 and sell it today you would earn a total of  95.00  from holding Photocat AS or generate 11.18% return on investment over 90 days.

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

Photocat AS  vs.  Nordic Iron Ore

Photocat AS

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Photocat AS are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Photocat may actually be approaching a critical reversion point that can send shares even higher in August 2025.

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 Photocat and Nordic Iron

The main advantage of trading using opposite Photocat and Nordic Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Photocat 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 Photocat AS 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.

Check out your portfolio center.

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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.