Correlation Between Exela Technologies and North Media

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Can any of the company-specific risk be diversified away by investing in both Exela Technologies and North Media 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 Exela Technologies and North Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exela Technologies and North Media AS, you can compare the effects of market volatilities on Exela Technologies and North Media 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 Exela Technologies with a short position of North Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exela Technologies and North Media.

Diversification Opportunities for Exela Technologies and North Media

-0.62
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Exela and North is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Exela Technologies and North Media AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North Media AS and Exela Technologies 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 Exela Technologies are associated (or correlated) with North Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North Media AS has no effect on the direction of Exela Technologies i.e., Exela Technologies and North Media go up and down completely randomly.

Pair Corralation between Exela Technologies and North Media

Given the investment horizon of 90 days Exela Technologies is expected to under-perform the North Media. In addition to that, Exela Technologies is 5.09 times more volatile than North Media AS. It trades about -0.02 of its total potential returns per unit of risk. North Media AS is currently generating about 0.05 per unit of volatility. If you would invest  5,366  in North Media AS on December 29, 2023 and sell it today you would earn a total of  1,054  from holding North Media AS or generate 19.64% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy99.63%
ValuesDaily Returns

Exela Technologies  vs.  North Media AS

 Performance 
       Timeline  
Exela Technologies 

Risk-Adjusted Performance

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High
Very Weak
Over the last 90 days Exela Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong essential indicators, Exela Technologies is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.
North Media AS 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days North Media AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical indicators, North Media is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Exela Technologies and North Media Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Exela Technologies and North Media

The main advantage of trading using opposite Exela Technologies and North Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exela Technologies position performs unexpectedly, North Media 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 North Media will offset losses from the drop in North Media's long position.
The idea behind Exela Technologies and North Media 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.

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