Correlation Between NTG Nordic and ACCSYS TECHPLC

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Can any of the company-specific risk be diversified away by investing in both NTG Nordic and ACCSYS TECHPLC 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 ACCSYS TECHPLC 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 ACCSYS TECHPLC EO, you can compare the effects of market volatilities on NTG Nordic and ACCSYS TECHPLC 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 ACCSYS TECHPLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of NTG Nordic and ACCSYS TECHPLC.

Diversification Opportunities for NTG Nordic and ACCSYS TECHPLC

0.72
  Correlation Coefficient

Poor diversification

The 3 months correlation between NTG and ACCSYS is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding NTG Nordic Transport and ACCSYS TECHPLC EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACCSYS TECHPLC EO 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 ACCSYS TECHPLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACCSYS TECHPLC EO has no effect on the direction of NTG Nordic i.e., NTG Nordic and ACCSYS TECHPLC go up and down completely randomly.

Pair Corralation between NTG Nordic and ACCSYS TECHPLC

Assuming the 90 days trading horizon NTG Nordic Transport is expected to generate 0.53 times more return on investment than ACCSYS TECHPLC. However, NTG Nordic Transport is 1.87 times less risky than ACCSYS TECHPLC. It trades about 0.08 of its potential returns per unit of risk. ACCSYS TECHPLC EO is currently generating about 0.01 per unit of risk. If you would invest  3,265  in NTG Nordic Transport on December 11, 2024 and sell it today you would earn a total of  170.00  from holding NTG Nordic Transport or generate 5.21% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

NTG Nordic Transport  vs.  ACCSYS TECHPLC EO

 Performance 
       Timeline  
NTG Nordic Transport 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days NTG Nordic Transport has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, NTG Nordic is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
ACCSYS TECHPLC EO 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days ACCSYS TECHPLC EO has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, ACCSYS TECHPLC is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

NTG Nordic and ACCSYS TECHPLC Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with NTG Nordic and ACCSYS TECHPLC

The main advantage of trading using opposite NTG Nordic and ACCSYS TECHPLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NTG Nordic position performs unexpectedly, ACCSYS TECHPLC 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 ACCSYS TECHPLC will offset losses from the drop in ACCSYS TECHPLC's long position.
The idea behind NTG Nordic Transport and ACCSYS TECHPLC EO pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.

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