Correlation Between Ecotel Communication and NTG Nordic
Can any of the company-specific risk be diversified away by investing in both Ecotel Communication 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 Ecotel Communication and NTG Nordic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ecotel communication ag and NTG Nordic Transport, you can compare the effects of market volatilities on Ecotel Communication 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 Ecotel Communication with a short position of NTG Nordic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecotel Communication and NTG Nordic.
Diversification Opportunities for Ecotel Communication and NTG Nordic
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ecotel and NTG is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding ecotel communication ag 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 Ecotel Communication 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 ecotel communication ag 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 Ecotel Communication i.e., Ecotel Communication and NTG Nordic go up and down completely randomly.
Pair Corralation between Ecotel Communication and NTG Nordic
Assuming the 90 days trading horizon ecotel communication ag is expected to generate 0.96 times more return on investment than NTG Nordic. However, ecotel communication ag is 1.05 times less risky than NTG Nordic. It trades about -0.04 of its potential returns per unit of risk. NTG Nordic Transport is currently generating about -0.39 per unit of risk. If you would invest 1,390 in ecotel communication ag on October 13, 2024 and sell it today you would lose (15.00) from holding ecotel communication ag or give up 1.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
ecotel communication ag vs. NTG Nordic Transport
Performance |
| Timeline |
| ecotel communication |
| NTG Nordic Transport |
Ecotel Communication and NTG Nordic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecotel Communication and NTG Nordic
The main advantage of trading using opposite Ecotel Communication and NTG Nordic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecotel Communication 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.| Ecotel Communication vs. GRIFFIN MINING LTD | Ecotel Communication vs. ARDAGH METAL PACDL 0001 | Ecotel Communication vs. MEDCAW INVESTMENTS LS 01 | Ecotel Communication vs. HK Electric Investments |
| NTG Nordic vs. ecotel communication ag | NTG Nordic vs. GREENX METALS LTD | NTG Nordic vs. Forsys Metals Corp | NTG Nordic vs. Zijin Mining Group |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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