Correlation Between NTG Nordic and AECOM TECHNOLOGY
Can any of the company-specific risk be diversified away by investing in both NTG Nordic and AECOM TECHNOLOGY 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 AECOM TECHNOLOGY 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 AECOM TECHNOLOGY, you can compare the effects of market volatilities on NTG Nordic and AECOM TECHNOLOGY 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 AECOM TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of NTG Nordic and AECOM TECHNOLOGY.
Diversification Opportunities for NTG Nordic and AECOM TECHNOLOGY
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NTG and AECOM is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding NTG Nordic Transport and AECOM TECHNOLOGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AECOM TECHNOLOGY 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 AECOM TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AECOM TECHNOLOGY has no effect on the direction of NTG Nordic i.e., NTG Nordic and AECOM TECHNOLOGY go up and down completely randomly.
Pair Corralation between NTG Nordic and AECOM TECHNOLOGY
Assuming the 90 days trading horizon NTG Nordic Transport is expected to generate 0.94 times more return on investment than AECOM TECHNOLOGY. However, NTG Nordic Transport is 1.06 times less risky than AECOM TECHNOLOGY. It trades about 0.13 of its potential returns per unit of risk. AECOM TECHNOLOGY is currently generating about -0.35 per unit of risk. If you would invest 3,120 in NTG Nordic Transport on November 27, 2024 and sell it today you would earn a total of 105.00 from holding NTG Nordic Transport or generate 3.37% 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. AECOM TECHNOLOGY
Performance |
| Timeline |
| NTG Nordic Transport |
| AECOM TECHNOLOGY |
NTG Nordic and AECOM TECHNOLOGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NTG Nordic and AECOM TECHNOLOGY
The main advantage of trading using opposite NTG Nordic and AECOM TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NTG Nordic position performs unexpectedly, AECOM TECHNOLOGY 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 AECOM TECHNOLOGY will offset losses from the drop in AECOM TECHNOLOGY's long position.| NTG Nordic vs. Mitsui Chemicals | NTG Nordic vs. De Grey Mining | NTG Nordic vs. Calibre Mining Corp | NTG Nordic vs. MUTUIONLINE |
| AECOM TECHNOLOGY vs. GOLDQUEST MINING | AECOM TECHNOLOGY vs. Wizz Air Holdings | AECOM TECHNOLOGY vs. Perseus Mining Limited | AECOM TECHNOLOGY vs. SYSTEMAIR AB |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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