Correlation Between CN MODERN and NTG Nordic
Can any of the company-specific risk be diversified away by investing in both CN MODERN and NTG Nordic 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 CN MODERN and NTG Nordic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CN MODERN DAIRY and NTG Nordic Transport, you can compare the effects of market volatilities on CN MODERN and NTG Nordic 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 CN MODERN with a short position of NTG Nordic. Check out your portfolio center. Please also check ongoing floating volatility patterns of CN MODERN and NTG Nordic.
Diversification Opportunities for CN MODERN and NTG Nordic
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 07M and NTG is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding CN MODERN DAIRY and NTG Nordic Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NTG Nordic Transport and CN MODERN 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 CN MODERN DAIRY are associated (or correlated) with NTG Nordic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NTG Nordic Transport has no effect on the direction of CN MODERN i.e., CN MODERN and NTG Nordic go up and down completely randomly.
Pair Corralation between CN MODERN and NTG Nordic
Assuming the 90 days trading horizon CN MODERN DAIRY is expected to under-perform the NTG Nordic. In addition to that, CN MODERN is 1.44 times more volatile than NTG Nordic Transport. It trades about -0.18 of its total potential returns per unit of risk. NTG Nordic Transport is currently generating about -0.24 per unit of volatility. If you would invest 3,435 in NTG Nordic Transport on October 29, 2024 and sell it today you would lose (285.00) from holding NTG Nordic Transport or give up 8.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CN MODERN DAIRY vs. NTG Nordic Transport
Performance |
| Timeline |
| CN MODERN DAIRY |
| NTG Nordic Transport |
CN MODERN and NTG Nordic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CN MODERN and NTG Nordic
The main advantage of trading using opposite CN MODERN and NTG Nordic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CN MODERN position performs unexpectedly, NTG Nordic 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 NTG Nordic will offset losses from the drop in NTG Nordic's long position.| CN MODERN vs. Keck Seng Investments | CN MODERN vs. MGIC INVESTMENT | CN MODERN vs. BE Semiconductor Industries | CN MODERN vs. FIRST SAVINGS FINL |
| NTG Nordic vs. PLAYTIKA HOLDING DL 01 | NTG Nordic vs. Verizon Communications | NTG Nordic vs. COMBA TELECOM SYST | NTG Nordic vs. Playa Hotels Resorts |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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