Correlation Between NTG Nordic and Sumitomo Mitsui
Can any of the company-specific risk be diversified away by investing in both NTG Nordic and Sumitomo Mitsui 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 Sumitomo Mitsui 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 Sumitomo Mitsui Construction, you can compare the effects of market volatilities on NTG Nordic and Sumitomo Mitsui 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 Sumitomo Mitsui. Check out your portfolio center. Please also check ongoing floating volatility patterns of NTG Nordic and Sumitomo Mitsui.
Diversification Opportunities for NTG Nordic and Sumitomo Mitsui
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NTG and Sumitomo is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding NTG Nordic Transport and Sumitomo Mitsui Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sumitomo Mitsui Cons 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 Sumitomo Mitsui. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sumitomo Mitsui Cons has no effect on the direction of NTG Nordic i.e., NTG Nordic and Sumitomo Mitsui go up and down completely randomly.
Pair Corralation between NTG Nordic and Sumitomo Mitsui
Assuming the 90 days trading horizon NTG Nordic Transport is expected to under-perform the Sumitomo Mitsui. In addition to that, NTG Nordic is 1.39 times more volatile than Sumitomo Mitsui Construction. It trades about -0.02 of its total potential returns per unit of risk. Sumitomo Mitsui Construction is currently generating about 0.03 per unit of volatility. If you would invest 236.00 in Sumitomo Mitsui Construction on September 24, 2024 and sell it today you would earn a total of 12.00 from holding Sumitomo Mitsui Construction or generate 5.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NTG Nordic Transport vs. Sumitomo Mitsui Construction
Performance |
| Timeline |
| NTG Nordic Transport |
| Sumitomo Mitsui Cons |
NTG Nordic and Sumitomo Mitsui Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NTG Nordic and Sumitomo Mitsui
The main advantage of trading using opposite NTG Nordic and Sumitomo Mitsui positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NTG Nordic position performs unexpectedly, Sumitomo Mitsui 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 Sumitomo Mitsui will offset losses from the drop in Sumitomo Mitsui's long position.| NTG Nordic vs. MITSUBISHI STEEL MFG | NTG Nordic vs. ABO GROUP ENVIRONMENT | NTG Nordic vs. Khiron Life Sciences | NTG Nordic vs. United States Steel |
| Sumitomo Mitsui vs. Apple Inc | Sumitomo Mitsui vs. Apple Inc | Sumitomo Mitsui vs. Apple Inc | Sumitomo Mitsui vs. Apple Inc |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |