Correlation Between NCC AB and Instalco Intressenter
Can any of the company-specific risk be diversified away by investing in both NCC AB and Instalco Intressenter 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 NCC AB and Instalco Intressenter into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NCC AB and Instalco Intressenter AB, you can compare the effects of market volatilities on NCC AB and Instalco Intressenter 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 NCC AB with a short position of Instalco Intressenter. Check out your portfolio center. Please also check ongoing floating volatility patterns of NCC AB and Instalco Intressenter.
Diversification Opportunities for NCC AB and Instalco Intressenter
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NCC and Instalco is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding NCC AB and Instalco Intressenter AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Instalco Intressenter and NCC AB 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 NCC AB are associated (or correlated) with Instalco Intressenter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Instalco Intressenter has no effect on the direction of NCC AB i.e., NCC AB and Instalco Intressenter go up and down completely randomly.
Pair Corralation between NCC AB and Instalco Intressenter
Assuming the 90 days trading horizon NCC AB is expected to generate 0.75 times more return on investment than Instalco Intressenter. However, NCC AB is 1.34 times less risky than Instalco Intressenter. It trades about 0.06 of its potential returns per unit of risk. Instalco Intressenter AB is currently generating about -0.01 per unit of risk. If you would invest 10,204 in NCC AB on August 30, 2024 and sell it today you would earn a total of 6,046 from holding NCC AB or generate 59.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NCC AB vs. Instalco Intressenter AB
Performance |
| Timeline |
| NCC AB |
| Instalco Intressenter |
NCC AB and Instalco Intressenter Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NCC AB and Instalco Intressenter
The main advantage of trading using opposite NCC AB and Instalco Intressenter positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NCC AB position performs unexpectedly, Instalco Intressenter 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 Instalco Intressenter will offset losses from the drop in Instalco Intressenter's long position.The idea behind NCC AB and Instalco Intressenter AB 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.| Instalco Intressenter vs. Lifco AB | Instalco Intressenter vs. Sdiptech AB | Instalco Intressenter vs. Vitec Software Group | Instalco Intressenter vs. Addtech 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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