Correlation Between SWISS WATER and NTG Nordic
Can any of the company-specific risk be diversified away by investing in both SWISS WATER 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 SWISS WATER and NTG Nordic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SWISS WATER DECAFFCOFFEE and NTG Nordic Transport, you can compare the effects of market volatilities on SWISS WATER 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 SWISS WATER with a short position of NTG Nordic. Check out your portfolio center. Please also check ongoing floating volatility patterns of SWISS WATER and NTG Nordic.
Diversification Opportunities for SWISS WATER and NTG Nordic
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SWISS and NTG is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding SWISS WATER DECAFFCOFFEE 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 SWISS WATER 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 SWISS WATER DECAFFCOFFEE 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 SWISS WATER i.e., SWISS WATER and NTG Nordic go up and down completely randomly.
Pair Corralation between SWISS WATER and NTG Nordic
Assuming the 90 days horizon SWISS WATER DECAFFCOFFEE is expected to generate 1.29 times more return on investment than NTG Nordic. However, SWISS WATER is 1.29 times more volatile than NTG Nordic Transport. It trades about 0.08 of its potential returns per unit of risk. NTG Nordic Transport is currently generating about -0.05 per unit of risk. If you would invest 262.00 in SWISS WATER DECAFFCOFFEE on August 27, 2024 and sell it today you would earn a total of 10.00 from holding SWISS WATER DECAFFCOFFEE or generate 3.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SWISS WATER DECAFFCOFFEE vs. NTG Nordic Transport
Performance |
| Timeline |
| SWISS WATER DECAFFCOFFEE |
| NTG Nordic Transport |
SWISS WATER and NTG Nordic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SWISS WATER and NTG Nordic
The main advantage of trading using opposite SWISS WATER and NTG Nordic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SWISS WATER 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.| SWISS WATER vs. Superior Plus Corp | SWISS WATER vs. NMI Holdings | SWISS WATER vs. Origin Agritech | SWISS WATER vs. SIVERS SEMICONDUCTORS AB |
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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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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