Correlation Between NTG Nordic and JD SPORTS
Can any of the company-specific risk be diversified away by investing in both NTG Nordic and JD 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 JD 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 JD SPORTS FASH, you can compare the effects of market volatilities on NTG Nordic and JD 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 JD SPORTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of NTG Nordic and JD SPORTS.
Diversification Opportunities for NTG Nordic and JD SPORTS
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NTG and 9JD is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding NTG Nordic Transport and JD SPORTS FASH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JD SPORTS FASH 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 JD SPORTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JD SPORTS FASH has no effect on the direction of NTG Nordic i.e., NTG Nordic and JD SPORTS go up and down completely randomly.
Pair Corralation between NTG Nordic and JD SPORTS
Assuming the 90 days trading horizon NTG Nordic Transport is expected to under-perform the JD SPORTS. But the stock apears to be less risky and, when comparing its historical volatility, NTG Nordic Transport is 1.81 times less risky than JD SPORTS. The stock trades about -0.42 of its potential returns per unit of risk. The JD SPORTS FASH is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest 123.00 in JD SPORTS FASH on October 12, 2024 and sell it today you would lose (7.00) from holding JD SPORTS FASH or give up 5.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NTG Nordic Transport vs. JD SPORTS FASH
Performance |
| Timeline |
| NTG Nordic Transport |
| JD SPORTS FASH |
NTG Nordic and JD SPORTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NTG Nordic and JD SPORTS
The main advantage of trading using opposite NTG Nordic and JD SPORTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NTG Nordic position performs unexpectedly, JD 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 JD SPORTS will offset losses from the drop in JD SPORTS's long position.| NTG Nordic vs. The Hongkong and | NTG Nordic vs. Pebblebrook Hotel Trust | NTG Nordic vs. Choice Hotels International | NTG Nordic vs. MHP Hotel AG |
| JD SPORTS vs. ALERION CLEANPOWER | JD SPORTS vs. ScanSource | JD SPORTS vs. Cleanaway Waste Management | JD SPORTS vs. Carnegie Clean Energy |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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