Correlation Between KAUFMAN ET and NTG Nordic
Can any of the company-specific risk be diversified away by investing in both KAUFMAN ET 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 KAUFMAN ET and NTG Nordic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KAUFMAN ET BROAD and NTG Nordic Transport, you can compare the effects of market volatilities on KAUFMAN ET 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 KAUFMAN ET with a short position of NTG Nordic. Check out your portfolio center. Please also check ongoing floating volatility patterns of KAUFMAN ET and NTG Nordic.
Diversification Opportunities for KAUFMAN ET and NTG Nordic
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between KAUFMAN and NTG is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding KAUFMAN ET BROAD 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 KAUFMAN ET 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 KAUFMAN ET BROAD 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 KAUFMAN ET i.e., KAUFMAN ET and NTG Nordic go up and down completely randomly.
Pair Corralation between KAUFMAN ET and NTG Nordic
Assuming the 90 days trading horizon KAUFMAN ET BROAD is expected to under-perform the NTG Nordic. But the stock apears to be less risky and, when comparing its historical volatility, KAUFMAN ET BROAD is 1.07 times less risky than NTG Nordic. The stock trades about -0.27 of its potential returns per unit of risk. The NTG Nordic Transport is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 3,705 in NTG Nordic Transport on September 1, 2024 and sell it today you would earn a total of 125.00 from holding NTG Nordic Transport or generate 3.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KAUFMAN ET BROAD vs. NTG Nordic Transport
Performance |
| Timeline |
| KAUFMAN ET BROAD |
| NTG Nordic Transport |
KAUFMAN ET and NTG Nordic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KAUFMAN ET and NTG Nordic
The main advantage of trading using opposite KAUFMAN ET and NTG Nordic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KAUFMAN ET 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.| KAUFMAN ET vs. SIVERS SEMICONDUCTORS AB | KAUFMAN ET vs. Darden Restaurants | KAUFMAN ET vs. Reliance Steel Aluminum | KAUFMAN ET vs. Q2M Managementberatung AG |
| NTG Nordic vs. Superior Plus Corp | NTG Nordic vs. NMI Holdings | NTG Nordic vs. Origin Agritech | NTG Nordic vs. SIVERS SEMICONDUCTORS AB |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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