Correlation Between NTG Nordic and Darden Restaurants
Can any of the company-specific risk be diversified away by investing in both NTG Nordic and Darden Restaurants 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 Darden Restaurants 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 Darden Restaurants, you can compare the effects of market volatilities on NTG Nordic and Darden Restaurants 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 Darden Restaurants. Check out your portfolio center. Please also check ongoing floating volatility patterns of NTG Nordic and Darden Restaurants.
Diversification Opportunities for NTG Nordic and Darden Restaurants
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NTG and Darden is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding NTG Nordic Transport and Darden Restaurants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Darden Restaurants 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 Darden Restaurants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Darden Restaurants has no effect on the direction of NTG Nordic i.e., NTG Nordic and Darden Restaurants go up and down completely randomly.
Pair Corralation between NTG Nordic and Darden Restaurants
Assuming the 90 days trading horizon NTG Nordic Transport is expected to under-perform the Darden Restaurants. In addition to that, NTG Nordic is 1.25 times more volatile than Darden Restaurants. It trades about -0.22 of its total potential returns per unit of risk. Darden Restaurants is currently generating about 0.25 per unit of volatility. If you would invest 17,947 in Darden Restaurants on November 5, 2024 and sell it today you would earn a total of 1,328 from holding Darden Restaurants or generate 7.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NTG Nordic Transport vs. Darden Restaurants
Performance |
| Timeline |
| NTG Nordic Transport |
| Darden Restaurants |
NTG Nordic and Darden Restaurants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NTG Nordic and Darden Restaurants
The main advantage of trading using opposite NTG Nordic and Darden Restaurants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NTG Nordic position performs unexpectedly, Darden Restaurants 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 Darden Restaurants will offset losses from the drop in Darden Restaurants' long position.| NTG Nordic vs. Kuehne Nagel International | NTG Nordic vs. ZTO EXPRESS | NTG Nordic vs. NIKKON HOLDINGS TD | NTG Nordic vs. SENKO GROUP HOLDINGS |
| Darden Restaurants vs. National Beverage Corp | Darden Restaurants vs. Tencent Music Entertainment | Darden Restaurants vs. BOSTON BEER A | Darden Restaurants vs. ATRESMEDIA |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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