Correlation Between NTG Nordic and Zoom Video

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both NTG Nordic and Zoom Video 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 Zoom Video 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 Zoom Video Communications, you can compare the effects of market volatilities on NTG Nordic and Zoom Video 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 Zoom Video. Check out your portfolio center. Please also check ongoing floating volatility patterns of NTG Nordic and Zoom Video.

Diversification Opportunities for NTG Nordic and Zoom Video

-0.56
  Correlation Coefficient

Excellent diversification

The 3 months correlation between NTG and Zoom is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding NTG Nordic Transport and Zoom Video Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zoom Video Communications 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 Zoom Video. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zoom Video Communications has no effect on the direction of NTG Nordic i.e., NTG Nordic and Zoom Video go up and down completely randomly.

Pair Corralation between NTG Nordic and Zoom Video

Assuming the 90 days trading horizon NTG Nordic Transport is expected to under-perform the Zoom Video. But the stock apears to be less risky and, when comparing its historical volatility, NTG Nordic Transport is 1.07 times less risky than Zoom Video. The stock trades about -0.02 of its potential returns per unit of risk. The Zoom Video Communications is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  5,873  in Zoom Video Communications on September 24, 2024 and sell it today you would earn a total of  2,306  from holding Zoom Video Communications or generate 39.26% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

NTG Nordic Transport  vs.  Zoom Video Communications

 Performance 
       Timeline  
NTG Nordic Transport 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days NTG Nordic Transport has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.
Zoom Video Communications 

Risk-Adjusted Performance

16 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Zoom Video Communications are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Zoom Video unveiled solid returns over the last few months and may actually be approaching a breakup point.

NTG Nordic and Zoom Video Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with NTG Nordic and Zoom Video

The main advantage of trading using opposite NTG Nordic and Zoom Video positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NTG Nordic position performs unexpectedly, Zoom Video 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 Zoom Video will offset losses from the drop in Zoom Video's long position.
The idea behind NTG Nordic Transport and Zoom Video Communications 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.
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.

Other Complementary Tools

Correlation Analysis
Reduce portfolio risk simply by holding instruments which are not perfectly correlated
Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format
Portfolio Optimization
Compute new portfolio that will generate highest expected return given your specified tolerance for risk
Theme Ratings
Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance
Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas