Correlation Between NTG Nordic and Addus HomeCare
Can any of the company-specific risk be diversified away by investing in both NTG Nordic and Addus HomeCare 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 Addus HomeCare 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 Addus HomeCare, you can compare the effects of market volatilities on NTG Nordic and Addus HomeCare 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 Addus HomeCare. Check out your portfolio center. Please also check ongoing floating volatility patterns of NTG Nordic and Addus HomeCare.
Diversification Opportunities for NTG Nordic and Addus HomeCare
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NTG and Addus is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding NTG Nordic Transport and Addus HomeCare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addus HomeCare 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 Addus HomeCare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Addus HomeCare has no effect on the direction of NTG Nordic i.e., NTG Nordic and Addus HomeCare go up and down completely randomly.
Pair Corralation between NTG Nordic and Addus HomeCare
Assuming the 90 days trading horizon NTG Nordic Transport is expected to generate 0.88 times more return on investment than Addus HomeCare. However, NTG Nordic Transport is 1.13 times less risky than Addus HomeCare. It trades about -0.1 of its potential returns per unit of risk. Addus HomeCare is currently generating about -0.15 per unit of risk. If you would invest 3,835 in NTG Nordic Transport on September 13, 2024 and sell it today you would lose (120.00) from holding NTG Nordic Transport or give up 3.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NTG Nordic Transport vs. Addus HomeCare
Performance |
| Timeline |
| NTG Nordic Transport |
| Addus HomeCare |
NTG Nordic and Addus HomeCare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NTG Nordic and Addus HomeCare
The main advantage of trading using opposite NTG Nordic and Addus HomeCare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NTG Nordic position performs unexpectedly, Addus HomeCare 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 Addus HomeCare will offset losses from the drop in Addus HomeCare's long position.| NTG Nordic vs. Superior Plus Corp | NTG Nordic vs. SIVERS SEMICONDUCTORS AB | NTG Nordic vs. NorAm Drilling AS | NTG Nordic vs. Norsk Hydro ASA |
| Addus HomeCare vs. Ramsay Health Care | Addus HomeCare vs. Universal Health Services | Addus HomeCare vs. Superior Plus Corp | Addus HomeCare vs. SIVERS SEMICONDUCTORS AB |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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