Correlation Between NTG Nordic and PennantPark Investment
Can any of the company-specific risk be diversified away by investing in both NTG Nordic and PennantPark Investment 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 PennantPark Investment 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 PennantPark Investment, you can compare the effects of market volatilities on NTG Nordic and PennantPark Investment 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 PennantPark Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of NTG Nordic and PennantPark Investment.
Diversification Opportunities for NTG Nordic and PennantPark Investment
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NTG and PennantPark is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding NTG Nordic Transport and PennantPark Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PennantPark Investment 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 PennantPark Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PennantPark Investment has no effect on the direction of NTG Nordic i.e., NTG Nordic and PennantPark Investment go up and down completely randomly.
Pair Corralation between NTG Nordic and PennantPark Investment
Assuming the 90 days trading horizon NTG Nordic Transport is expected to under-perform the PennantPark Investment. In addition to that, NTG Nordic is 1.39 times more volatile than PennantPark Investment. It trades about -0.02 of its total potential returns per unit of risk. PennantPark Investment is currently generating about 0.06 per unit of volatility. If you would invest 554.00 in PennantPark Investment on October 18, 2024 and sell it today you would earn a total of 127.00 from holding PennantPark Investment or generate 22.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NTG Nordic Transport vs. PennantPark Investment
Performance |
| Timeline |
| NTG Nordic Transport |
| PennantPark Investment |
NTG Nordic and PennantPark Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NTG Nordic and PennantPark Investment
The main advantage of trading using opposite NTG Nordic and PennantPark Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NTG Nordic position performs unexpectedly, PennantPark Investment 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 PennantPark Investment will offset losses from the drop in PennantPark Investment's long position.| NTG Nordic vs. Choice Hotels International | NTG Nordic vs. DALATA HOTEL | NTG Nordic vs. CITY OFFICE REIT | NTG Nordic vs. Hyatt Hotels |
| PennantPark Investment vs. Columbia Sportswear | PennantPark Investment vs. SCIENCE IN SPORT | PennantPark Investment vs. NTG Nordic Transport | PennantPark Investment vs. Gaztransport Technigaz SA |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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