Correlation Between NTG Nordic and Fevertree Drinks
Can any of the company-specific risk be diversified away by investing in both NTG Nordic and Fevertree Drinks 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 Fevertree Drinks 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 Fevertree Drinks PLC, you can compare the effects of market volatilities on NTG Nordic and Fevertree Drinks 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 Fevertree Drinks. Check out your portfolio center. Please also check ongoing floating volatility patterns of NTG Nordic and Fevertree Drinks.
Diversification Opportunities for NTG Nordic and Fevertree Drinks
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NTG and Fevertree is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding NTG Nordic Transport and Fevertree Drinks PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fevertree Drinks PLC 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 Fevertree Drinks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fevertree Drinks PLC has no effect on the direction of NTG Nordic i.e., NTG Nordic and Fevertree Drinks go up and down completely randomly.
Pair Corralation between NTG Nordic and Fevertree Drinks
Assuming the 90 days trading horizon NTG Nordic Transport is expected to generate 0.69 times more return on investment than Fevertree Drinks. However, NTG Nordic Transport is 1.46 times less risky than Fevertree Drinks. It trades about 0.02 of its potential returns per unit of risk. Fevertree Drinks PLC is currently generating about -0.16 per unit of risk. If you would invest 3,805 in NTG Nordic Transport on August 31, 2024 and sell it today you would earn a total of 10.00 from holding NTG Nordic Transport or generate 0.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NTG Nordic Transport vs. Fevertree Drinks PLC
Performance |
| Timeline |
| NTG Nordic Transport |
| Fevertree Drinks PLC |
NTG Nordic and Fevertree Drinks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NTG Nordic and Fevertree Drinks
The main advantage of trading using opposite NTG Nordic and Fevertree Drinks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NTG Nordic position performs unexpectedly, Fevertree Drinks 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 Fevertree Drinks will offset losses from the drop in Fevertree Drinks' long position.| NTG Nordic vs. Superior Plus Corp | NTG Nordic vs. NMI Holdings | NTG Nordic vs. Origin Agritech | NTG Nordic vs. SIVERS SEMICONDUCTORS AB |
| Fevertree Drinks vs. Apple Inc | Fevertree Drinks vs. Apple Inc | Fevertree Drinks vs. Apple Inc | Fevertree Drinks 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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