Correlation Between VARIOUS EATERIES and NTG Nordic
Can any of the company-specific risk be diversified away by investing in both VARIOUS EATERIES 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 VARIOUS EATERIES and NTG Nordic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VARIOUS EATERIES LS and NTG Nordic Transport, you can compare the effects of market volatilities on VARIOUS EATERIES 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 VARIOUS EATERIES with a short position of NTG Nordic. Check out your portfolio center. Please also check ongoing floating volatility patterns of VARIOUS EATERIES and NTG Nordic.
Diversification Opportunities for VARIOUS EATERIES and NTG Nordic
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between VARIOUS and NTG is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding VARIOUS EATERIES LS 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 VARIOUS EATERIES 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 VARIOUS EATERIES LS 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 VARIOUS EATERIES i.e., VARIOUS EATERIES and NTG Nordic go up and down completely randomly.
Pair Corralation between VARIOUS EATERIES and NTG Nordic
Assuming the 90 days horizon VARIOUS EATERIES LS is expected to under-perform the NTG Nordic. But the stock apears to be less risky and, when comparing its historical volatility, VARIOUS EATERIES LS is 1.44 times less risky than NTG Nordic. The stock trades about -0.04 of its potential returns per unit of risk. The NTG Nordic Transport is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 3,935 in NTG Nordic Transport on September 1, 2024 and sell it today you would lose (105.00) from holding NTG Nordic Transport or give up 2.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VARIOUS EATERIES LS vs. NTG Nordic Transport
Performance |
| Timeline |
| VARIOUS EATERIES |
| NTG Nordic Transport |
VARIOUS EATERIES and NTG Nordic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VARIOUS EATERIES and NTG Nordic
The main advantage of trading using opposite VARIOUS EATERIES and NTG Nordic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VARIOUS EATERIES 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.| VARIOUS EATERIES vs. USWE SPORTS AB | VARIOUS EATERIES vs. Fukuyama Transporting Co | VARIOUS EATERIES vs. Transport International Holdings | VARIOUS EATERIES vs. NetSol Technologies |
| 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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