Correlation Between Nilfisk Holding and Netcompany Group
Can any of the company-specific risk be diversified away by investing in both Nilfisk Holding and Netcompany 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 Nilfisk Holding and Netcompany Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nilfisk Holding AS and Netcompany Group AS, you can compare the effects of market volatilities on Nilfisk Holding and Netcompany 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 Nilfisk Holding with a short position of Netcompany Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nilfisk Holding and Netcompany Group.
Diversification Opportunities for Nilfisk Holding and Netcompany Group
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nilfisk and Netcompany is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Nilfisk Holding AS and Netcompany Group AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Netcompany Group and Nilfisk Holding 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 Nilfisk Holding AS are associated (or correlated) with Netcompany Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Netcompany Group has no effect on the direction of Nilfisk Holding i.e., Nilfisk Holding and Netcompany Group go up and down completely randomly.
Pair Corralation between Nilfisk Holding and Netcompany Group
Assuming the 90 days trading horizon Nilfisk Holding AS is expected to under-perform the Netcompany Group. But the stock apears to be less risky and, when comparing its historical volatility, Nilfisk Holding AS is 1.06 times less risky than Netcompany Group. The stock trades about -0.04 of its potential returns per unit of risk. The Netcompany Group AS is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 27,940 in Netcompany Group AS on August 29, 2024 and sell it today you would earn a total of 7,660 from holding Netcompany Group AS or generate 27.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nilfisk Holding AS vs. Netcompany Group AS
Performance |
| Timeline |
| Nilfisk Holding AS |
| Netcompany Group |
Nilfisk Holding and Netcompany Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nilfisk Holding and Netcompany Group
The main advantage of trading using opposite Nilfisk Holding and Netcompany Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nilfisk Holding position performs unexpectedly, Netcompany 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 Netcompany Group will offset losses from the drop in Netcompany Group's long position.| Nilfisk Holding vs. GN Store Nord | Nilfisk Holding vs. DSV Panalpina AS | Nilfisk Holding vs. ISS AS | Nilfisk Holding vs. Ambu AS |
| Netcompany Group vs. GN Store Nord | Netcompany Group vs. Ambu AS | Netcompany Group vs. ROCKWOOL International AS | Netcompany Group vs. Genmab 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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