Correlation Between NTG Nordic and Bank of America
Can any of the company-specific risk be diversified away by investing in both NTG Nordic and Bank of America 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 Bank of America 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 Verizon Communications, you can compare the effects of market volatilities on NTG Nordic and Bank of America 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 Bank of America. Check out your portfolio center. Please also check ongoing floating volatility patterns of NTG Nordic and Bank of America.
Diversification Opportunities for NTG Nordic and Bank of America
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NTG and Bank is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding NTG Nordic Transport and Verizon Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Verizon Communications 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 Bank of America. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Verizon Communications has no effect on the direction of NTG Nordic i.e., NTG Nordic and Bank of America go up and down completely randomly.
Pair Corralation between NTG Nordic and Bank of America
Assuming the 90 days trading horizon NTG Nordic Transport is expected to under-perform the Bank of America. In addition to that, NTG Nordic is 1.47 times more volatile than Verizon Communications. It trades about -0.2 of its total potential returns per unit of risk. Verizon Communications is currently generating about 0.09 per unit of volatility. If you would invest 3,747 in Verizon Communications on November 7, 2024 and sell it today you would earn a total of 84.00 from holding Verizon Communications or generate 2.24% 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. Verizon Communications
Performance |
| Timeline |
| NTG Nordic Transport |
| Verizon Communications |
NTG Nordic and Bank of America Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NTG Nordic and Bank of America
The main advantage of trading using opposite NTG Nordic and Bank of America positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NTG Nordic position performs unexpectedly, Bank of America 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 Bank of America will offset losses from the drop in Bank of America's long position.| NTG Nordic vs. PLANT VEDA FOODS | NTG Nordic vs. ASURE SOFTWARE | NTG Nordic vs. NH Foods | NTG Nordic vs. SMA Solar Technology |
| Bank of America vs. PennantPark Investment | Bank of America vs. Zijin Mining Group | Bank of America vs. PennyMac Mortgage Investment | Bank of America vs. MGIC INVESTMENT |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |