Correlation Between NN Group and SCOTT TECHNOLOGY
Can any of the company-specific risk be diversified away by investing in both NN Group and SCOTT TECHNOLOGY 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 NN Group and SCOTT TECHNOLOGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NN Group NV and SCOTT TECHNOLOGY, you can compare the effects of market volatilities on NN Group and SCOTT TECHNOLOGY 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 NN Group with a short position of SCOTT TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of NN Group and SCOTT TECHNOLOGY.
Diversification Opportunities for NN Group and SCOTT TECHNOLOGY
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 2NN and SCOTT is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding NN Group NV and SCOTT TECHNOLOGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCOTT TECHNOLOGY and NN Group 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 NN Group NV are associated (or correlated) with SCOTT TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCOTT TECHNOLOGY has no effect on the direction of NN Group i.e., NN Group and SCOTT TECHNOLOGY go up and down completely randomly.
Pair Corralation between NN Group and SCOTT TECHNOLOGY
Assuming the 90 days horizon NN Group NV is expected to generate 0.36 times more return on investment than SCOTT TECHNOLOGY. However, NN Group NV is 2.8 times less risky than SCOTT TECHNOLOGY. It trades about 0.03 of its potential returns per unit of risk. SCOTT TECHNOLOGY is currently generating about 0.0 per unit of risk. If you would invest 4,129 in NN Group NV on September 5, 2024 and sell it today you would earn a total of 131.00 from holding NN Group NV or generate 3.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NN Group NV vs. SCOTT TECHNOLOGY
Performance |
| Timeline |
| NN Group NV |
| SCOTT TECHNOLOGY |
NN Group and SCOTT TECHNOLOGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NN Group and SCOTT TECHNOLOGY
The main advantage of trading using opposite NN Group and SCOTT TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NN Group position performs unexpectedly, SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY will offset losses from the drop in SCOTT TECHNOLOGY's long position.| NN Group vs. NORTHEAST UTILITIES | NN Group vs. Hyrican Informationssysteme Aktiengesellschaft | NN Group vs. DICKER DATA LTD | NN Group vs. CHEMICAL INDUSTRIES |
| SCOTT TECHNOLOGY vs. SOFI TECHNOLOGIES | SCOTT TECHNOLOGY vs. Lion Biotechnologies | SCOTT TECHNOLOGY vs. TFS FINANCIAL | SCOTT TECHNOLOGY vs. QBE Insurance Group |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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