Correlation Between Ford and NTG Nordic
Can any of the company-specific risk be diversified away by investing in both Ford 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 Ford and NTG Nordic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and NTG Nordic Transport, you can compare the effects of market volatilities on Ford 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 Ford with a short position of NTG Nordic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and NTG Nordic.
Diversification Opportunities for Ford and NTG Nordic
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ford and NTG is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor 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 Ford 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 Ford Motor 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 Ford i.e., Ford and NTG Nordic go up and down completely randomly.
Pair Corralation between Ford and NTG Nordic
Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.88 times more return on investment than NTG Nordic. However, Ford Motor is 1.14 times less risky than NTG Nordic. It trades about 0.0 of its potential returns per unit of risk. NTG Nordic Transport is currently generating about -0.03 per unit of risk. If you would invest 1,236 in Ford Motor on August 31, 2024 and sell it today you would lose (123.00) from holding Ford Motor or give up 9.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.42% |
| Values | Daily Returns |
Ford Motor vs. NTG Nordic Transport
Performance |
| Timeline |
| Ford Motor |
| NTG Nordic Transport |
Ford and NTG Nordic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and NTG Nordic
The main advantage of trading using opposite Ford and NTG Nordic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford 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.The idea behind Ford Motor and NTG Nordic Transport pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| NTG Nordic vs. Superior Plus Corp | NTG Nordic vs. NMI Holdings | NTG Nordic vs. Origin Agritech | NTG Nordic vs. SIVERS SEMICONDUCTORS AB |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |