Correlation Between DFDS AS and NTG Nordic
Can any of the company-specific risk be diversified away by investing in both DFDS 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 DFDS 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 DFDS AS and NTG Nordic Transport, you can compare the effects of market volatilities on DFDS 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 DFDS AS with a short position of NTG Nordic. Check out your portfolio center. Please also check ongoing floating volatility patterns of DFDS AS and NTG Nordic.
Diversification Opportunities for DFDS AS and NTG Nordic
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DFDS and NTG is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding DFDS 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 DFDS 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 DFDS 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 DFDS AS i.e., DFDS AS and NTG Nordic go up and down completely randomly.
Pair Corralation between DFDS AS and NTG Nordic
Assuming the 90 days trading horizon DFDS AS is expected to under-perform the NTG Nordic. But the stock apears to be less risky and, when comparing its historical volatility, DFDS AS is 1.31 times less risky than NTG Nordic. The stock trades about -0.11 of its potential returns per unit of risk. The NTG Nordic Transport is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 28,450 in NTG Nordic Transport on August 25, 2024 and sell it today you would earn a total of 900.00 from holding NTG Nordic Transport or generate 3.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DFDS AS vs. NTG Nordic Transport
Performance |
| Timeline |
| DFDS AS |
| NTG Nordic Transport |
DFDS AS and NTG Nordic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DFDS AS and NTG Nordic
The main advantage of trading using opposite DFDS AS and NTG Nordic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DFDS 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.| DFDS AS vs. North Media AS | DFDS AS vs. HH International AS | DFDS AS vs. Per Aarsleff Holding | DFDS AS vs. First Farms AS |
| NTG Nordic vs. North Media AS | NTG Nordic vs. HH International AS | NTG Nordic vs. Per Aarsleff Holding | NTG Nordic vs. First Farms 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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