Correlation Between Norsk Hydro and MPC Energy
Can any of the company-specific risk be diversified away by investing in both Norsk Hydro and MPC Energy 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 Norsk Hydro and MPC Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Norsk Hydro ASA and MPC Energy Solutions, you can compare the effects of market volatilities on Norsk Hydro and MPC Energy 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 Norsk Hydro with a short position of MPC Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norsk Hydro and MPC Energy.
Diversification Opportunities for Norsk Hydro and MPC Energy
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Norsk and MPC is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Norsk Hydro ASA and MPC Energy Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MPC Energy Solutions and Norsk Hydro 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 Norsk Hydro ASA are associated (or correlated) with MPC Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MPC Energy Solutions has no effect on the direction of Norsk Hydro i.e., Norsk Hydro and MPC Energy go up and down completely randomly.
Pair Corralation between Norsk Hydro and MPC Energy
Assuming the 90 days trading horizon Norsk Hydro is expected to generate 5.59 times less return on investment than MPC Energy. But when comparing it to its historical volatility, Norsk Hydro ASA is 6.17 times less risky than MPC Energy. It trades about 0.2 of its potential returns per unit of risk. MPC Energy Solutions is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 954.00 in MPC Energy Solutions on September 4, 2025 and sell it today you would earn a total of 331.00 from holding MPC Energy Solutions or generate 34.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Norsk Hydro ASA vs. MPC Energy Solutions
Performance |
| Timeline |
| Norsk Hydro ASA |
| MPC Energy Solutions |
Norsk Hydro and MPC Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norsk Hydro and MPC Energy
The main advantage of trading using opposite Norsk Hydro and MPC Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norsk Hydro position performs unexpectedly, MPC Energy 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 MPC Energy will offset losses from the drop in MPC Energy's long position.| Norsk Hydro vs. SpareBank 1 stlandet | Norsk Hydro vs. CmbTech NV | Norsk Hydro vs. Aurskog Sparebank | Norsk Hydro vs. Flekkefjord Sparebank |
| MPC Energy vs. Helgeland Sparebank | MPC Energy vs. Aasen Sparebank | MPC Energy vs. Morrow Bank ASA | MPC Energy vs. Jaeren Sparebank |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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