Correlation Between NTG Nordic and ONWARD MEDICAL
Can any of the company-specific risk be diversified away by investing in both NTG Nordic and ONWARD MEDICAL 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 ONWARD MEDICAL 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 ONWARD MEDICAL BV, you can compare the effects of market volatilities on NTG Nordic and ONWARD MEDICAL 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 ONWARD MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of NTG Nordic and ONWARD MEDICAL.
Diversification Opportunities for NTG Nordic and ONWARD MEDICAL
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NTG and ONWARD is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding NTG Nordic Transport and ONWARD MEDICAL BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ONWARD MEDICAL BV 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 ONWARD MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ONWARD MEDICAL BV has no effect on the direction of NTG Nordic i.e., NTG Nordic and ONWARD MEDICAL go up and down completely randomly.
Pair Corralation between NTG Nordic and ONWARD MEDICAL
Assuming the 90 days trading horizon NTG Nordic Transport is expected to generate 0.58 times more return on investment than ONWARD MEDICAL. However, NTG Nordic Transport is 1.71 times less risky than ONWARD MEDICAL. It trades about -0.05 of its potential returns per unit of risk. ONWARD MEDICAL BV is currently generating about -0.03 per unit of risk. If you would invest 4,005 in NTG Nordic Transport on August 28, 2024 and sell it today you would lose (90.00) from holding NTG Nordic Transport or give up 2.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NTG Nordic Transport vs. ONWARD MEDICAL BV
Performance |
| Timeline |
| NTG Nordic Transport |
| ONWARD MEDICAL BV |
NTG Nordic and ONWARD MEDICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NTG Nordic and ONWARD MEDICAL
The main advantage of trading using opposite NTG Nordic and ONWARD MEDICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NTG Nordic position performs unexpectedly, ONWARD MEDICAL 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 ONWARD MEDICAL will offset losses from the drop in ONWARD MEDICAL's long position.| NTG Nordic vs. Lifeway Foods | NTG Nordic vs. PT Indofood Sukses | NTG Nordic vs. TreeHouse Foods | NTG Nordic vs. ADRIATIC METALS LS 013355 |
| ONWARD MEDICAL vs. Superior Plus Corp | ONWARD MEDICAL vs. NMI Holdings | ONWARD MEDICAL vs. Origin Agritech | ONWARD MEDICAL vs. SIVERS SEMICONDUCTORS AB |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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