Correlation Between NTG Nordic and Burlington Stores
Can any of the company-specific risk be diversified away by investing in both NTG Nordic and Burlington Stores 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 Burlington Stores 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 Burlington Stores, you can compare the effects of market volatilities on NTG Nordic and Burlington Stores 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 Burlington Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of NTG Nordic and Burlington Stores.
Diversification Opportunities for NTG Nordic and Burlington Stores
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NTG and Burlington is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding NTG Nordic Transport and Burlington Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burlington Stores 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 Burlington Stores. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burlington Stores has no effect on the direction of NTG Nordic i.e., NTG Nordic and Burlington Stores go up and down completely randomly.
Pair Corralation between NTG Nordic and Burlington Stores
Assuming the 90 days trading horizon NTG Nordic is expected to generate 1.42 times less return on investment than Burlington Stores. In addition to that, NTG Nordic is 1.17 times more volatile than Burlington Stores. It trades about 0.03 of its total potential returns per unit of risk. Burlington Stores is currently generating about 0.05 per unit of volatility. If you would invest 18,200 in Burlington Stores on September 13, 2024 and sell it today you would earn a total of 9,400 from holding Burlington Stores or generate 51.65% 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. Burlington Stores
Performance |
| Timeline |
| NTG Nordic Transport |
| Burlington Stores |
NTG Nordic and Burlington Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NTG Nordic and Burlington Stores
The main advantage of trading using opposite NTG Nordic and Burlington Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NTG Nordic position performs unexpectedly, Burlington Stores 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 Burlington Stores will offset losses from the drop in Burlington Stores' 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 |
| Burlington Stores vs. Apple Inc | Burlington Stores vs. Apple Inc | Burlington Stores vs. Apple Inc | Burlington Stores vs. Apple Inc |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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