Correlation Between NTG Nordic and Grupo Aval
Can any of the company-specific risk be diversified away by investing in both NTG Nordic and Grupo Aval 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 Grupo Aval 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 Grupo Aval Acciones, you can compare the effects of market volatilities on NTG Nordic and Grupo Aval 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 Grupo Aval. Check out your portfolio center. Please also check ongoing floating volatility patterns of NTG Nordic and Grupo Aval.
Diversification Opportunities for NTG Nordic and Grupo Aval
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NTG and Grupo is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding NTG Nordic Transport and Grupo Aval Acciones in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Aval Acciones 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 Grupo Aval. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Aval Acciones has no effect on the direction of NTG Nordic i.e., NTG Nordic and Grupo Aval go up and down completely randomly.
Pair Corralation between NTG Nordic and Grupo Aval
Assuming the 90 days trading horizon NTG Nordic Transport is expected to under-perform the Grupo Aval. In addition to that, NTG Nordic is 1.17 times more volatile than Grupo Aval Acciones. It trades about -0.03 of its total potential returns per unit of risk. Grupo Aval Acciones is currently generating about 0.19 per unit of volatility. If you would invest 182.00 in Grupo Aval Acciones on August 25, 2024 and sell it today you would earn a total of 13.00 from holding Grupo Aval Acciones or generate 7.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
NTG Nordic Transport vs. Grupo Aval Acciones
Performance |
| Timeline |
| NTG Nordic Transport |
| Grupo Aval Acciones |
NTG Nordic and Grupo Aval Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NTG Nordic and Grupo Aval
The main advantage of trading using opposite NTG Nordic and Grupo Aval positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NTG Nordic position performs unexpectedly, Grupo Aval 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 Grupo Aval will offset losses from the drop in Grupo Aval's long position.| NTG Nordic vs. SINGAPORE POST | NTG Nordic vs. Superior Plus Corp | NTG Nordic vs. NMI Holdings | NTG Nordic vs. Origin Agritech |
| Grupo Aval vs. Air Transport Services | Grupo Aval vs. ARDAGH METAL PACDL 0001 | Grupo Aval vs. NTG Nordic Transport | Grupo Aval vs. GREENX METALS LTD |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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