Correlation Between NTG Nordic and Bank of New York Mellon
Can any of the company-specific risk be diversified away by investing in both NTG Nordic and Bank of New York Mellon 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 New York Mellon 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 The Bank of, you can compare the effects of market volatilities on NTG Nordic and Bank of New York Mellon 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 New York Mellon. Check out your portfolio center. Please also check ongoing floating volatility patterns of NTG Nordic and Bank of New York Mellon.
Diversification Opportunities for NTG Nordic and Bank of New York Mellon
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NTG and Bank is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding NTG Nordic Transport and The Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of New York Mellon 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 New York Mellon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of New York Mellon has no effect on the direction of NTG Nordic i.e., NTG Nordic and Bank of New York Mellon go up and down completely randomly.
Pair Corralation between NTG Nordic and Bank of New York Mellon
Assuming the 90 days trading horizon NTG Nordic is expected to generate 6.74 times less return on investment than Bank of New York Mellon. In addition to that, NTG Nordic is 1.65 times more volatile than The Bank of. It trades about 0.02 of its total potential returns per unit of risk. The Bank of is currently generating about 0.21 per unit of volatility. If you would invest 5,931 in The Bank of on August 27, 2024 and sell it today you would earn a total of 1,735 from holding The Bank of or generate 29.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NTG Nordic Transport vs. The Bank of
Performance |
| Timeline |
| NTG Nordic Transport |
| Bank of New York Mellon |
NTG Nordic and Bank of New York Mellon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NTG Nordic and Bank of New York Mellon
The main advantage of trading using opposite NTG Nordic and Bank of New York Mellon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NTG Nordic position performs unexpectedly, Bank of New York Mellon 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 New York Mellon will offset losses from the drop in Bank of New York Mellon's long position.| NTG Nordic vs. China Resources Beer | NTG Nordic vs. MYFAIR GOLD P | NTG Nordic vs. Tsingtao Brewery | NTG Nordic vs. HF SINCLAIR P |
| Bank of New York Mellon vs. NTG Nordic Transport | Bank of New York Mellon vs. SLR Investment Corp | Bank of New York Mellon vs. Apollo Investment Corp | Bank of New York Mellon vs. REINET INVESTMENTS SCA |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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