Correlation Between NTG Nordic and Gladstone Investment
Can any of the company-specific risk be diversified away by investing in both NTG Nordic and Gladstone 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 Gladstone 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 Gladstone Investment, you can compare the effects of market volatilities on NTG Nordic and Gladstone 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 Gladstone Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of NTG Nordic and Gladstone Investment.
Diversification Opportunities for NTG Nordic and Gladstone Investment
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between NTG and Gladstone is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding NTG Nordic Transport and Gladstone Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gladstone 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 Gladstone Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gladstone Investment has no effect on the direction of NTG Nordic i.e., NTG Nordic and Gladstone Investment go up and down completely randomly.
Pair Corralation between NTG Nordic and Gladstone Investment
Assuming the 90 days trading horizon NTG Nordic Transport is expected to under-perform the Gladstone Investment. In addition to that, NTG Nordic is 1.35 times more volatile than Gladstone Investment. It trades about -0.25 of its total potential returns per unit of risk. Gladstone Investment is currently generating about 0.04 per unit of volatility. If you would invest 1,283 in Gladstone Investment on November 1, 2024 and sell it today you would earn a total of 13.00 from holding Gladstone Investment or generate 1.01% 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. Gladstone Investment
Performance |
| Timeline |
| NTG Nordic Transport |
| Gladstone Investment |
NTG Nordic and Gladstone Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NTG Nordic and Gladstone Investment
The main advantage of trading using opposite NTG Nordic and Gladstone Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NTG Nordic position performs unexpectedly, Gladstone 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 Gladstone Investment will offset losses from the drop in Gladstone Investment's long position.| NTG Nordic vs. BANKINTER ADR 2007 | NTG Nordic vs. CDN IMPERIAL BANK | NTG Nordic vs. Synovus Financial Corp | NTG Nordic vs. RCS MediaGroup SpA |
| Gladstone Investment vs. Calibre Mining Corp | Gladstone Investment vs. CNVISION MEDIA | Gladstone Investment vs. ZINC MEDIA GR | Gladstone Investment vs. GALENA MINING LTD |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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