Correlation Between NTG Nordic and Xenia Hotels
Can any of the company-specific risk be diversified away by investing in both NTG Nordic and Xenia Hotels 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 Xenia Hotels 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 Xenia Hotels Resorts, you can compare the effects of market volatilities on NTG Nordic and Xenia Hotels 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 Xenia Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of NTG Nordic and Xenia Hotels.
Diversification Opportunities for NTG Nordic and Xenia Hotels
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NTG and Xenia is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding NTG Nordic Transport and Xenia Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xenia Hotels Resorts 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 Xenia Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xenia Hotels Resorts has no effect on the direction of NTG Nordic i.e., NTG Nordic and Xenia Hotels go up and down completely randomly.
Pair Corralation between NTG Nordic and Xenia Hotels
Assuming the 90 days trading horizon NTG Nordic Transport is expected to under-perform the Xenia Hotels. But the stock apears to be less risky and, when comparing its historical volatility, NTG Nordic Transport is 1.36 times less risky than Xenia Hotels. The stock trades about -0.43 of its potential returns per unit of risk. The Xenia Hotels Resorts is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 1,477 in Xenia Hotels Resorts on October 26, 2024 and sell it today you would lose (67.00) from holding Xenia Hotels Resorts or give up 4.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NTG Nordic Transport vs. Xenia Hotels Resorts
Performance |
| Timeline |
| NTG Nordic Transport |
| Xenia Hotels Resorts |
NTG Nordic and Xenia Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NTG Nordic and Xenia Hotels
The main advantage of trading using opposite NTG Nordic and Xenia Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NTG Nordic position performs unexpectedly, Xenia Hotels 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 Xenia Hotels will offset losses from the drop in Xenia Hotels' long position.| NTG Nordic vs. FIH MOBILE | NTG Nordic vs. MAVEN WIRELESS SWEDEN | NTG Nordic vs. SCOTT TECHNOLOGY | NTG Nordic vs. Charter Communications |
| Xenia Hotels vs. NTG Nordic Transport | Xenia Hotels vs. TITANIUM TRANSPORTGROUP | Xenia Hotels vs. Broadcom | Xenia Hotels vs. DICKS Sporting Goods |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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