Correlation Between NTG Nordic and PKSHA TECHNOLOGY
Can any of the company-specific risk be diversified away by investing in both NTG Nordic and PKSHA TECHNOLOGY 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 PKSHA TECHNOLOGY 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 PKSHA TECHNOLOGY INC, you can compare the effects of market volatilities on NTG Nordic and PKSHA TECHNOLOGY 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 PKSHA TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of NTG Nordic and PKSHA TECHNOLOGY.
Diversification Opportunities for NTG Nordic and PKSHA TECHNOLOGY
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NTG and PKSHA is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding NTG Nordic Transport and PKSHA TECHNOLOGY INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PKSHA TECHNOLOGY INC 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 PKSHA TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PKSHA TECHNOLOGY INC has no effect on the direction of NTG Nordic i.e., NTG Nordic and PKSHA TECHNOLOGY go up and down completely randomly.
Pair Corralation between NTG Nordic and PKSHA TECHNOLOGY
Assuming the 90 days trading horizon NTG Nordic is expected to generate 22.96 times less return on investment than PKSHA TECHNOLOGY. But when comparing it to its historical volatility, NTG Nordic Transport is 2.57 times less risky than PKSHA TECHNOLOGY. It trades about 0.03 of its potential returns per unit of risk. PKSHA TECHNOLOGY INC is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 2,100 in PKSHA TECHNOLOGY INC on September 2, 2024 and sell it today you would earn a total of 500.00 from holding PKSHA TECHNOLOGY INC or generate 23.81% 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. PKSHA TECHNOLOGY INC
Performance |
| Timeline |
| NTG Nordic Transport |
| PKSHA TECHNOLOGY INC |
NTG Nordic and PKSHA TECHNOLOGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NTG Nordic and PKSHA TECHNOLOGY
The main advantage of trading using opposite NTG Nordic and PKSHA TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NTG Nordic position performs unexpectedly, PKSHA TECHNOLOGY 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 PKSHA TECHNOLOGY will offset losses from the drop in PKSHA TECHNOLOGY'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 |
| PKSHA TECHNOLOGY vs. Microsoft | PKSHA TECHNOLOGY vs. Superior Plus Corp | PKSHA TECHNOLOGY vs. NMI Holdings | PKSHA TECHNOLOGY vs. Origin Agritech |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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