Correlation Between NTG Nordic and Aena SME
Can any of the company-specific risk be diversified away by investing in both NTG Nordic and Aena SME 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 Aena SME 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 Aena SME SA, you can compare the effects of market volatilities on NTG Nordic and Aena SME 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 Aena SME. Check out your portfolio center. Please also check ongoing floating volatility patterns of NTG Nordic and Aena SME.
Diversification Opportunities for NTG Nordic and Aena SME
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NTG and Aena is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding NTG Nordic Transport and Aena SME SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aena SME SA 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 Aena SME. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aena SME SA has no effect on the direction of NTG Nordic i.e., NTG Nordic and Aena SME go up and down completely randomly.
Pair Corralation between NTG Nordic and Aena SME
Assuming the 90 days trading horizon NTG Nordic is expected to generate 1.56 times less return on investment than Aena SME. In addition to that, NTG Nordic is 2.21 times more volatile than Aena SME SA. It trades about 0.03 of its total potential returns per unit of risk. Aena SME SA is currently generating about 0.1 per unit of volatility. If you would invest 11,089 in Aena SME SA on September 12, 2024 and sell it today you would earn a total of 8,811 from holding Aena SME SA or generate 79.46% 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. Aena SME SA
Performance |
| Timeline |
| NTG Nordic Transport |
| Aena SME SA |
NTG Nordic and Aena SME Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NTG Nordic and Aena SME
The main advantage of trading using opposite NTG Nordic and Aena SME positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NTG Nordic position performs unexpectedly, Aena SME 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 Aena SME will offset losses from the drop in Aena SME's long position.| NTG Nordic vs. Gold Road Resources | NTG Nordic vs. FORMPIPE SOFTWARE AB | NTG Nordic vs. GOLD ROAD RES | NTG Nordic vs. Broadcom |
| Aena SME vs. Air Transport Services | Aena SME vs. IMAGIN MEDICAL INC | Aena SME vs. NTG Nordic Transport | Aena SME vs. ONWARD MEDICAL BV |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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