Correlation Between NTG Nordic and POLENERGIA
Can any of the company-specific risk be diversified away by investing in both NTG Nordic and POLENERGIA 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 NTG Nordic and POLENERGIA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NTG Nordic Transport and POLENERGIA SA ZY, you can compare the effects of market volatilities on NTG Nordic and POLENERGIA 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 NTG Nordic with a short position of POLENERGIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of NTG Nordic and POLENERGIA.
Diversification Opportunities for NTG Nordic and POLENERGIA
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NTG and POLENERGIA is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding NTG Nordic Transport and POLENERGIA SA ZY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on POLENERGIA SA ZY and NTG Nordic 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 NTG Nordic Transport are associated (or correlated) with POLENERGIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of POLENERGIA SA ZY has no effect on the direction of NTG Nordic i.e., NTG Nordic and POLENERGIA go up and down completely randomly.
Pair Corralation between NTG Nordic and POLENERGIA
Assuming the 90 days trading horizon NTG Nordic Transport is expected to under-perform the POLENERGIA. In addition to that, NTG Nordic is 1.04 times more volatile than POLENERGIA SA ZY. It trades about -0.37 of its total potential returns per unit of risk. POLENERGIA SA ZY is currently generating about -0.06 per unit of volatility. If you would invest 1,615 in POLENERGIA SA ZY on October 24, 2024 and sell it today you would lose (30.00) from holding POLENERGIA SA ZY or give up 1.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NTG Nordic Transport vs. POLENERGIA SA ZY
Performance |
| Timeline |
| NTG Nordic Transport |
| POLENERGIA SA ZY |
NTG Nordic and POLENERGIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NTG Nordic and POLENERGIA
The main advantage of trading using opposite NTG Nordic and POLENERGIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NTG Nordic position performs unexpectedly, POLENERGIA 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 POLENERGIA will offset losses from the drop in POLENERGIA's long position.| NTG Nordic vs. Transport International Holdings | NTG Nordic vs. BII Railway Transportation | NTG Nordic vs. Columbia Sportswear | NTG Nordic vs. American Eagle Outfitters |
| POLENERGIA vs. SBM OFFSHORE | POLENERGIA vs. Waste Management | POLENERGIA vs. CEOTRONICS | POLENERGIA vs. Solstad Offshore ASA |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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