Correlation Between NTG Nordic and Fiverr International
Can any of the company-specific risk be diversified away by investing in both NTG Nordic and Fiverr International 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 Fiverr International 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 Fiverr International, you can compare the effects of market volatilities on NTG Nordic and Fiverr International 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 Fiverr International. Check out your portfolio center. Please also check ongoing floating volatility patterns of NTG Nordic and Fiverr International.
Diversification Opportunities for NTG Nordic and Fiverr International
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between NTG and Fiverr is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding NTG Nordic Transport and Fiverr International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fiverr International 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 Fiverr International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fiverr International has no effect on the direction of NTG Nordic i.e., NTG Nordic and Fiverr International go up and down completely randomly.
Pair Corralation between NTG Nordic and Fiverr International
Assuming the 90 days trading horizon NTG Nordic Transport is expected to under-perform the Fiverr International. But the stock apears to be less risky and, when comparing its historical volatility, NTG Nordic Transport is 2.61 times less risky than Fiverr International. The stock trades about -0.06 of its potential returns per unit of risk. The Fiverr International is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 2,316 in Fiverr International on August 30, 2024 and sell it today you would earn a total of 828.00 from holding Fiverr International or generate 35.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NTG Nordic Transport vs. Fiverr International
Performance |
| Timeline |
| NTG Nordic Transport |
| Fiverr International |
NTG Nordic and Fiverr International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NTG Nordic and Fiverr International
The main advantage of trading using opposite NTG Nordic and Fiverr International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NTG Nordic position performs unexpectedly, Fiverr International 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 Fiverr International will offset losses from the drop in Fiverr International's long position.| NTG Nordic vs. Superior Plus Corp | NTG Nordic vs. NMI Holdings | NTG Nordic vs. SIVERS SEMICONDUCTORS AB | NTG Nordic vs. Talanx AG |
| Fiverr International vs. Zijin Mining Group | Fiverr International vs. CHINA TONTINE WINES | Fiverr International vs. Jacquet Metal Service | Fiverr International vs. Lamar Advertising |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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