Correlation Between NTG Nordic and TRAINLINE PLC
Can any of the company-specific risk be diversified away by investing in both NTG Nordic and TRAINLINE PLC 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 TRAINLINE PLC 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 TRAINLINE PLC LS, you can compare the effects of market volatilities on NTG Nordic and TRAINLINE PLC 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 TRAINLINE PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of NTG Nordic and TRAINLINE PLC.
Diversification Opportunities for NTG Nordic and TRAINLINE PLC
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NTG and TRAINLINE is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding NTG Nordic Transport and TRAINLINE PLC LS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRAINLINE PLC LS 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 TRAINLINE PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRAINLINE PLC LS has no effect on the direction of NTG Nordic i.e., NTG Nordic and TRAINLINE PLC go up and down completely randomly.
Pair Corralation between NTG Nordic and TRAINLINE PLC
Assuming the 90 days trading horizon NTG Nordic is expected to generate 1.46 times less return on investment than TRAINLINE PLC. But when comparing it to its historical volatility, NTG Nordic Transport is 1.0 times less risky than TRAINLINE PLC. It trades about 0.03 of its potential returns per unit of risk. TRAINLINE PLC LS is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 342.00 in TRAINLINE PLC LS on September 1, 2024 and sell it today you would earn a total of 140.00 from holding TRAINLINE PLC LS or generate 40.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NTG Nordic Transport vs. TRAINLINE PLC LS
Performance |
| Timeline |
| NTG Nordic Transport |
| TRAINLINE PLC LS |
NTG Nordic and TRAINLINE PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NTG Nordic and TRAINLINE PLC
The main advantage of trading using opposite NTG Nordic and TRAINLINE PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NTG Nordic position performs unexpectedly, TRAINLINE PLC 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 TRAINLINE PLC will offset losses from the drop in TRAINLINE PLC's long position.| NTG Nordic vs. Superior Plus Corp | NTG Nordic vs. NMI Holdings | NTG Nordic vs. Origin Agritech | NTG Nordic vs. SIVERS SEMICONDUCTORS AB |
| TRAINLINE PLC vs. Mitsubishi Gas Chemical | TRAINLINE PLC vs. Nordic Semiconductor ASA | TRAINLINE PLC vs. Tower Semiconductor | TRAINLINE PLC vs. SEKISUI CHEMICAL |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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