Correlation Between NTG Nordic and Information Services
Can any of the company-specific risk be diversified away by investing in both NTG Nordic and Information Services 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 Information Services 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 Information Services International Dentsu, you can compare the effects of market volatilities on NTG Nordic and Information Services 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 Information Services. Check out your portfolio center. Please also check ongoing floating volatility patterns of NTG Nordic and Information Services.
Diversification Opportunities for NTG Nordic and Information Services
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NTG and Information is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding NTG Nordic Transport and Information Services Internati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Information Services 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 Information Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Information Services has no effect on the direction of NTG Nordic i.e., NTG Nordic and Information Services go up and down completely randomly.
Pair Corralation between NTG Nordic and Information Services
Assuming the 90 days trading horizon NTG Nordic Transport is expected to under-perform the Information Services. But the stock apears to be less risky and, when comparing its historical volatility, NTG Nordic Transport is 1.31 times less risky than Information Services. The stock trades about -0.1 of its potential returns per unit of risk. The Information Services International Dentsu is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 3,340 in Information Services International Dentsu on September 13, 2024 and sell it today you would earn a total of 260.00 from holding Information Services International Dentsu or generate 7.78% 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. Information Services Internati
Performance |
| Timeline |
| NTG Nordic Transport |
| Information Services |
NTG Nordic and Information Services Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NTG Nordic and Information Services
The main advantage of trading using opposite NTG Nordic and Information Services positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NTG Nordic position performs unexpectedly, Information Services 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 Information Services will offset losses from the drop in Information Services' 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 |
| Information Services vs. PARKEN Sport Entertainment | Information Services vs. Lifeway Foods | Information Services vs. Gaztransport Technigaz SA | Information Services vs. NTG Nordic Transport |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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