Correlation Between PM Thoresen and Nfc PLC

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

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

Diversification Opportunities for PM Thoresen and Nfc PLC

-0.53

Correlation Coefficient

PM Thoresen  Nfc PLC

Excellent diversification

The 3 months correlation between PMTA and Nfc is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding PM Thoresen Asia and Nfc PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nfc PLC and PM Thoresen 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 PM Thoresen Asia are associated (or correlated) with Nfc PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nfc PLC has no effect on the direction of PM Thoresen i.e., PM Thoresen and Nfc PLC go up and down completely randomly.

Pair Corralation between PM Thoresen and Nfc PLC

Assuming the 90 days trading horizon PM Thoresen Asia is expected to generate 0.47 times more return on investment than Nfc PLC. However, PM Thoresen Asia is 2.14 times less risky than Nfc PLC. It trades about 0.15 of its potential returns per unit of risk. Nfc PLC is currently generating about -0.05 per unit of risk. If you would invest  785.00  in PM Thoresen Asia on April 23, 2025 and sell it today you would earn a total of  150.00  from holding PM Thoresen Asia or generate 19.11% return on investment over 90 days.

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

PM Thoresen Asia  vs.  Nfc PLC

PM Thoresen Asia

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PM Thoresen Asia are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, PM Thoresen disclosed solid returns over the last few months and may actually be approaching a breakup point.

Nfc PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nfc PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental indicators remain quite persistent which may send shares a bit higher in August 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with PM Thoresen and Nfc PLC

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

The idea behind PM Thoresen Asia and Nfc PLC 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.