Correlation Between NTG Nordic and Heartland Financial
Can any of the company-specific risk be diversified away by investing in both NTG Nordic and Heartland Financial 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 Heartland Financial 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 Heartland Financial USA, you can compare the effects of market volatilities on NTG Nordic and Heartland Financial 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 Heartland Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of NTG Nordic and Heartland Financial.
Diversification Opportunities for NTG Nordic and Heartland Financial
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between NTG and Heartland is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding NTG Nordic Transport and Heartland Financial USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heartland Financial USA 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 Heartland Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heartland Financial USA has no effect on the direction of NTG Nordic i.e., NTG Nordic and Heartland Financial go up and down completely randomly.
Pair Corralation between NTG Nordic and Heartland Financial
Assuming the 90 days trading horizon NTG Nordic is expected to generate 7.54 times less return on investment than Heartland Financial. But when comparing it to its historical volatility, NTG Nordic Transport is 1.04 times less risky than Heartland Financial. It trades about 0.03 of its potential returns per unit of risk. Heartland Financial USA is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 4,797 in Heartland Financial USA on September 12, 2024 and sell it today you would earn a total of 1,653 from holding Heartland Financial USA or generate 34.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.46% |
| Values | Daily Returns |
NTG Nordic Transport vs. Heartland Financial USA
Performance |
| Timeline |
| NTG Nordic Transport |
| Heartland Financial USA |
NTG Nordic and Heartland Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NTG Nordic and Heartland Financial
The main advantage of trading using opposite NTG Nordic and Heartland Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NTG Nordic position performs unexpectedly, Heartland Financial 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 Heartland Financial will offset losses from the drop in Heartland Financial's long position.| NTG Nordic vs. Superior Plus Corp | NTG Nordic vs. SIVERS SEMICONDUCTORS AB | NTG Nordic vs. NorAm Drilling AS | NTG Nordic vs. Norsk Hydro ASA |
| Heartland Financial vs. Sixt Leasing SE | Heartland Financial vs. CarsalesCom | Heartland Financial vs. United Rentals | Heartland Financial vs. Commercial Vehicle Group |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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