Correlation Between Northfield Bancorp and NN Group
Can any of the company-specific risk be diversified away by investing in both Northfield Bancorp and NN 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 Northfield Bancorp and NN Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northfield Bancorp and NN Group NV, you can compare the effects of market volatilities on Northfield Bancorp and NN 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 Northfield Bancorp with a short position of NN Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northfield Bancorp and NN Group.
Diversification Opportunities for Northfield Bancorp and NN Group
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Northfield and NNGPF is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Northfield Bancorp and NN Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NN Group NV and Northfield Bancorp 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 Northfield Bancorp are associated (or correlated) with NN Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NN Group NV has no effect on the direction of Northfield Bancorp i.e., Northfield Bancorp and NN Group go up and down completely randomly.
Pair Corralation between Northfield Bancorp and NN Group
Given the investment horizon of 90 days Northfield Bancorp is expected to generate 13.48 times less return on investment than NN Group. But when comparing it to its historical volatility, Northfield Bancorp is 2.32 times less risky than NN Group. It trades about 0.01 of its potential returns per unit of risk. NN Group NV is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,666 in NN Group NV on September 2, 2024 and sell it today you would earn a total of 938.00 from holding NN Group NV or generate 25.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 79.44% |
| Values | Daily Returns |
Northfield Bancorp vs. NN Group NV
Performance |
| Timeline |
| Northfield Bancorp |
| NN Group NV |
Northfield Bancorp and NN Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northfield Bancorp and NN Group
The main advantage of trading using opposite Northfield Bancorp and NN Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northfield Bancorp position performs unexpectedly, NN 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 NN Group will offset losses from the drop in NN Group's long position.| Northfield Bancorp vs. Finward Bancorp | Northfield Bancorp vs. Community West Bancshares | Northfield Bancorp vs. First Financial Northwest | Northfield Bancorp vs. Home Bancorp |
| NN Group vs. NN Group NV | NN Group vs. Swiss Life Holding | NN Group vs. PICC Property and | NN Group vs. AXA SA |
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 CEOs Directory module to screen CEOs from public companies around the world.
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