Correlation Between NTG Nordic and Cass Information
Can any of the company-specific risk be diversified away by investing in both NTG Nordic and Cass Information 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 Cass Information 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 Cass Information Systems, you can compare the effects of market volatilities on NTG Nordic and Cass Information 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 Cass Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of NTG Nordic and Cass Information.
Diversification Opportunities for NTG Nordic and Cass Information
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NTG and Cass is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding NTG Nordic Transport and Cass Information Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cass Information Systems 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 Cass Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cass Information Systems has no effect on the direction of NTG Nordic i.e., NTG Nordic and Cass Information go up and down completely randomly.
Pair Corralation between NTG Nordic and Cass Information
Assuming the 90 days trading horizon NTG Nordic Transport is expected to under-perform the Cass Information. But the stock apears to be less risky and, when comparing its historical volatility, NTG Nordic Transport is 1.1 times less risky than Cass Information. The stock trades about -0.34 of its potential returns per unit of risk. The Cass Information Systems is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 4,170 in Cass Information Systems on October 30, 2024 and sell it today you would lose (210.00) from holding Cass Information Systems or give up 5.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NTG Nordic Transport vs. Cass Information Systems
Performance |
| Timeline |
| NTG Nordic Transport |
| Cass Information Systems |
NTG Nordic and Cass Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NTG Nordic and Cass Information
The main advantage of trading using opposite NTG Nordic and Cass Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NTG Nordic position performs unexpectedly, Cass Information 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 Cass Information will offset losses from the drop in Cass Information's long position.| NTG Nordic vs. Coor Service Management | NTG Nordic vs. Daito Trust Construction | NTG Nordic vs. Corporate Travel Management | NTG Nordic vs. Platinum Investment Management |
| Cass Information vs. MOUNT GIBSON IRON | Cass Information vs. PENN NATL GAMING | Cass Information vs. Mount Gibson Iron | Cass Information vs. The Japan Steel |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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