Correlation Between NTG Nordic and BRIT AMER
Can any of the company-specific risk be diversified away by investing in both NTG Nordic and BRIT AMER 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 BRIT AMER 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 BRIT AMER TOBACCO, you can compare the effects of market volatilities on NTG Nordic and BRIT AMER 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 BRIT AMER. Check out your portfolio center. Please also check ongoing floating volatility patterns of NTG Nordic and BRIT AMER.
Diversification Opportunities for NTG Nordic and BRIT AMER
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between NTG and BRIT is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding NTG Nordic Transport and BRIT AMER TOBACCO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRIT AMER TOBACCO 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 BRIT AMER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRIT AMER TOBACCO has no effect on the direction of NTG Nordic i.e., NTG Nordic and BRIT AMER go up and down completely randomly.
Pair Corralation between NTG Nordic and BRIT AMER
Assuming the 90 days trading horizon NTG Nordic Transport is expected to under-perform the BRIT AMER. In addition to that, NTG Nordic is 1.4 times more volatile than BRIT AMER TOBACCO. It trades about 0.0 of its total potential returns per unit of risk. BRIT AMER TOBACCO is currently generating about 0.37 per unit of volatility. If you would invest 3,210 in BRIT AMER TOBACCO on August 26, 2024 and sell it today you would earn a total of 363.00 from holding BRIT AMER TOBACCO or generate 11.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NTG Nordic Transport vs. BRIT AMER TOBACCO
Performance |
| Timeline |
| NTG Nordic Transport |
| BRIT AMER TOBACCO |
NTG Nordic and BRIT AMER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NTG Nordic and BRIT AMER
The main advantage of trading using opposite NTG Nordic and BRIT AMER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NTG Nordic position performs unexpectedly, BRIT AMER 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 BRIT AMER will offset losses from the drop in BRIT AMER's long position.| NTG Nordic vs. SINGAPORE POST | NTG Nordic vs. Superior Plus Corp | NTG Nordic vs. NMI Holdings | NTG Nordic vs. Origin Agritech |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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