Correlation Between NTG Nordic and WisdomTree Investments
Can any of the company-specific risk be diversified away by investing in both NTG Nordic and WisdomTree Investments 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 WisdomTree Investments 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 WisdomTree Investments, you can compare the effects of market volatilities on NTG Nordic and WisdomTree Investments 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 WisdomTree Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of NTG Nordic and WisdomTree Investments.
Diversification Opportunities for NTG Nordic and WisdomTree Investments
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between NTG and WisdomTree is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding NTG Nordic Transport and WisdomTree Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Investments 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 WisdomTree Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Investments has no effect on the direction of NTG Nordic i.e., NTG Nordic and WisdomTree Investments go up and down completely randomly.
Pair Corralation between NTG Nordic and WisdomTree Investments
Assuming the 90 days trading horizon NTG Nordic Transport is expected to generate 0.72 times more return on investment than WisdomTree Investments. However, NTG Nordic Transport is 1.4 times less risky than WisdomTree Investments. It trades about -0.42 of its potential returns per unit of risk. WisdomTree Investments is currently generating about -0.43 per unit of risk. If you would invest 3,625 in NTG Nordic Transport on October 12, 2024 and sell it today you would lose (320.00) from holding NTG Nordic Transport or give up 8.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NTG Nordic Transport vs. WisdomTree Investments
Performance |
| Timeline |
| NTG Nordic Transport |
| WisdomTree Investments |
NTG Nordic and WisdomTree Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NTG Nordic and WisdomTree Investments
The main advantage of trading using opposite NTG Nordic and WisdomTree Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NTG Nordic position performs unexpectedly, WisdomTree Investments 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 WisdomTree Investments will offset losses from the drop in WisdomTree Investments' long position.| NTG Nordic vs. The Hongkong and | NTG Nordic vs. Pebblebrook Hotel Trust | NTG Nordic vs. Choice Hotels International | NTG Nordic vs. MHP Hotel AG |
| WisdomTree Investments vs. BANK OF CHINA | WisdomTree Investments vs. Virtu Financial | WisdomTree Investments vs. SYSTEMAIR AB | WisdomTree Investments vs. SOGECLAIR SA INH |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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