Correlation Between CBrain AS and NTG Nordic
Can any of the company-specific risk be diversified away by investing in both CBrain AS 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 CBrain AS and NTG Nordic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between cBrain AS and NTG Nordic Transport, you can compare the effects of market volatilities on CBrain AS 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 CBrain AS with a short position of NTG Nordic. Check out your portfolio center. Please also check ongoing floating volatility patterns of CBrain AS and NTG Nordic.
Diversification Opportunities for CBrain AS and NTG Nordic
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CBrain and NTG is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding cBrain AS 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 CBrain AS 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 cBrain AS 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 CBrain AS i.e., CBrain AS and NTG Nordic go up and down completely randomly.
Pair Corralation between CBrain AS and NTG Nordic
Assuming the 90 days trading horizon cBrain AS is expected to under-perform the NTG Nordic. In addition to that, CBrain AS is 5.08 times more volatile than NTG Nordic Transport. It trades about -0.25 of its total potential returns per unit of risk. NTG Nordic Transport is currently generating about 0.08 per unit of volatility. If you would invest 23,750 in NTG Nordic Transport on November 27, 2024 and sell it today you would earn a total of 450.00 from holding NTG Nordic Transport or generate 1.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
cBrain AS vs. NTG Nordic Transport
Performance |
| Timeline |
| cBrain AS |
| NTG Nordic Transport |
CBrain AS and NTG Nordic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CBrain AS and NTG Nordic
The main advantage of trading using opposite CBrain AS and NTG Nordic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CBrain AS 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.| CBrain AS vs. ChemoMetec AS | CBrain AS vs. Ambu AS | CBrain AS vs. Genmab AS | CBrain AS vs. Zealand Pharma AS |
| NTG Nordic vs. cBrain AS | NTG Nordic vs. Netcompany Group AS | NTG Nordic vs. ChemoMetec AS | NTG Nordic vs. NKT AS |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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