Correlation Between NKT AS and Tryg AS
Can any of the company-specific risk be diversified away by investing in both NKT AS and Tryg AS 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 NKT AS and Tryg AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NKT AS and Tryg AS, you can compare the effects of market volatilities on NKT AS and Tryg AS 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 NKT AS with a short position of Tryg AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of NKT AS and Tryg AS.
Diversification Opportunities for NKT AS and Tryg AS
Good diversification
The 3 months correlation between NKT and Tryg is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding NKT AS and Tryg AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tryg AS and NKT AS 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 NKT AS are associated (or correlated) with Tryg AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tryg AS has no effect on the direction of NKT AS i.e., NKT AS and Tryg AS go up and down completely randomly.
Pair Corralation between NKT AS and Tryg AS
Assuming the 90 days trading horizon NKT AS is expected to under-perform the Tryg AS. In addition to that, NKT AS is 2.56 times more volatile than Tryg AS. It trades about -0.36 of its total potential returns per unit of risk. Tryg AS is currently generating about -0.06 per unit of volatility. If you would invest 16,300 in Tryg AS on August 29, 2024 and sell it today you would lose (210.00) from holding Tryg AS or give up 1.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NKT AS vs. Tryg AS
Performance |
| Timeline |
| NKT AS |
| Tryg AS |
NKT AS and Tryg AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NKT AS and Tryg AS
The main advantage of trading using opposite NKT AS and Tryg AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NKT AS position performs unexpectedly, Tryg AS 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 Tryg AS will offset losses from the drop in Tryg AS's long position.| NKT AS vs. North Media AS | NKT AS vs. HH International AS | NKT AS vs. Per Aarsleff Holding | NKT AS vs. First Farms AS |
| Tryg AS vs. Dataproces Group AS | Tryg AS vs. cBrain AS | Tryg AS vs. ALK Abell AS | Tryg AS vs. ChemoMetec AS |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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