Correlation Between INTER CARS and NTG Nordic
Can any of the company-specific risk be diversified away by investing in both INTER CARS 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 INTER CARS and NTG Nordic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INTER CARS SA and NTG Nordic Transport, you can compare the effects of market volatilities on INTER CARS 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 INTER CARS with a short position of NTG Nordic. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTER CARS and NTG Nordic.
Diversification Opportunities for INTER CARS and NTG Nordic
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between INTER and NTG is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding INTER CARS SA 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 INTER CARS 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 INTER CARS SA 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 INTER CARS i.e., INTER CARS and NTG Nordic go up and down completely randomly.
Pair Corralation between INTER CARS and NTG Nordic
Assuming the 90 days horizon INTER CARS is expected to generate 1.26 times less return on investment than NTG Nordic. But when comparing it to its historical volatility, INTER CARS SA is 1.22 times less risky than NTG Nordic. It trades about 0.02 of its potential returns per unit of risk. NTG Nordic Transport is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 3,325 in NTG Nordic Transport on August 30, 2024 and sell it today you would earn a total of 505.00 from holding NTG Nordic Transport or generate 15.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
INTER CARS SA vs. NTG Nordic Transport
Performance |
| Timeline |
| INTER CARS SA |
| NTG Nordic Transport |
INTER CARS and NTG Nordic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTER CARS and NTG Nordic
The main advantage of trading using opposite INTER CARS and NTG Nordic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTER CARS 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.| INTER CARS vs. PT Astra International | INTER CARS vs. Continental Aktiengesellschaft | INTER CARS vs. Superior Plus Corp | INTER CARS vs. NMI Holdings |
| NTG Nordic vs. Superior Plus Corp | NTG Nordic vs. NMI Holdings | NTG Nordic vs. SIVERS SEMICONDUCTORS AB | NTG Nordic vs. Talanx AG |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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