Correlation Between NTG Nordic and USWE SPORTS
Can any of the company-specific risk be diversified away by investing in both NTG Nordic and USWE SPORTS 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 USWE SPORTS 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 USWE SPORTS AB, you can compare the effects of market volatilities on NTG Nordic and USWE SPORTS 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 USWE SPORTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of NTG Nordic and USWE SPORTS.
Diversification Opportunities for NTG Nordic and USWE SPORTS
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between NTG and USWE is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding NTG Nordic Transport and USWE SPORTS AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USWE SPORTS AB 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 USWE SPORTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USWE SPORTS AB has no effect on the direction of NTG Nordic i.e., NTG Nordic and USWE SPORTS go up and down completely randomly.
Pair Corralation between NTG Nordic and USWE SPORTS
Assuming the 90 days trading horizon NTG Nordic is expected to generate 2.99 times less return on investment than USWE SPORTS. But when comparing it to its historical volatility, NTG Nordic Transport is 2.05 times less risky than USWE SPORTS. It trades about 0.11 of its potential returns per unit of risk. USWE SPORTS AB is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 69.00 in USWE SPORTS AB on September 1, 2024 and sell it today you would earn a total of 7.00 from holding USWE SPORTS AB or generate 10.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NTG Nordic Transport vs. USWE SPORTS AB
Performance |
| Timeline |
| NTG Nordic Transport |
| USWE SPORTS AB |
NTG Nordic and USWE SPORTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NTG Nordic and USWE SPORTS
The main advantage of trading using opposite NTG Nordic and USWE SPORTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NTG Nordic position performs unexpectedly, USWE SPORTS 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 USWE SPORTS will offset losses from the drop in USWE SPORTS'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 |
| USWE SPORTS vs. Li Ning Company | USWE SPORTS vs. Trip Group Limited | USWE SPORTS vs. Superior Plus Corp | USWE SPORTS vs. NMI Holdings |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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