Correlation Between Nnit AS and Netcompany Group
Can any of the company-specific risk be diversified away by investing in both Nnit AS 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 Nnit AS and Netcompany Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nnit AS and Netcompany Group AS, you can compare the effects of market volatilities on Nnit AS 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 Nnit AS with a short position of Netcompany Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nnit AS and Netcompany Group.
Diversification Opportunities for Nnit AS and Netcompany Group
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nnit and Netcompany is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Nnit 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 Nnit 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 Nnit 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 Nnit AS i.e., Nnit AS and Netcompany Group go up and down completely randomly.
Pair Corralation between Nnit AS and Netcompany Group
Assuming the 90 days trading horizon Nnit AS is expected to generate 5.27 times less return on investment than Netcompany Group. In addition to that, Nnit AS is 1.08 times more volatile than Netcompany Group AS. It trades about 0.01 of its total potential returns per unit of risk. Netcompany Group AS is currently generating about 0.08 per unit of volatility. If you would invest 23,690 in Netcompany Group AS on October 20, 2024 and sell it today you would earn a total of 9,870 from holding Netcompany Group AS or generate 41.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nnit AS vs. Netcompany Group AS
Performance |
| Timeline |
| Nnit AS |
| Netcompany Group |
Nnit AS and Netcompany Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nnit AS and Netcompany Group
The main advantage of trading using opposite Nnit AS and Netcompany Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nnit AS 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.| Nnit AS vs. Nordea Bank Abp | Nnit AS vs. Novo Nordisk AS | Nnit AS vs. Alm Brand | Nnit AS vs. Vestjysk Bank 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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