Correlation Between NCAB and Norva24 Group
Can any of the company-specific risk be diversified away by investing in both NCAB and Norva24 Group 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 NCAB and Norva24 Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NCAB Group and Norva24 Group AB, you can compare the effects of market volatilities on NCAB and Norva24 Group 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 NCAB with a short position of Norva24 Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of NCAB and Norva24 Group.
Diversification Opportunities for NCAB and Norva24 Group
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NCAB and Norva24 is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding NCAB Group and Norva24 Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Norva24 Group AB and NCAB 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 NCAB Group are associated (or correlated) with Norva24 Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Norva24 Group AB has no effect on the direction of NCAB i.e., NCAB and Norva24 Group go up and down completely randomly.
Pair Corralation between NCAB and Norva24 Group
Assuming the 90 days trading horizon NCAB Group is expected to generate 0.97 times more return on investment than Norva24 Group. However, NCAB Group is 1.04 times less risky than Norva24 Group. It trades about -0.25 of its potential returns per unit of risk. Norva24 Group AB is currently generating about -0.3 per unit of risk. If you would invest 6,540 in NCAB Group on August 28, 2024 and sell it today you would lose (695.00) from holding NCAB Group or give up 10.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
NCAB Group vs. Norva24 Group AB
Performance |
| Timeline |
| NCAB Group |
| Norva24 Group AB |
NCAB and Norva24 Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NCAB and Norva24 Group
The main advantage of trading using opposite NCAB and Norva24 Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NCAB position performs unexpectedly, Norva24 Group 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 Norva24 Group will offset losses from the drop in Norva24 Group's long position.| NCAB vs. MIPS AB | NCAB vs. Hexatronic Group AB | NCAB vs. Lagercrantz Group AB | NCAB vs. Vitec Software Group |
| Norva24 Group vs. Fasadgruppen Group AB | Norva24 Group vs. Green Landscaping Group | Norva24 Group vs. Volati AB | Norva24 Group vs. Instalco Intressenter 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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