Correlation Between NTG Nordic and INTUITIVE SURGICAL
Can any of the company-specific risk be diversified away by investing in both NTG Nordic and INTUITIVE SURGICAL 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 INTUITIVE SURGICAL 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 INTUITIVE SURGICAL, you can compare the effects of market volatilities on NTG Nordic and INTUITIVE SURGICAL 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 INTUITIVE SURGICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of NTG Nordic and INTUITIVE SURGICAL.
Diversification Opportunities for NTG Nordic and INTUITIVE SURGICAL
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NTG and INTUITIVE is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding NTG Nordic Transport and INTUITIVE SURGICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTUITIVE SURGICAL 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 INTUITIVE SURGICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTUITIVE SURGICAL has no effect on the direction of NTG Nordic i.e., NTG Nordic and INTUITIVE SURGICAL go up and down completely randomly.
Pair Corralation between NTG Nordic and INTUITIVE SURGICAL
Assuming the 90 days trading horizon NTG Nordic is expected to generate 2.05 times less return on investment than INTUITIVE SURGICAL. In addition to that, NTG Nordic is 1.44 times more volatile than INTUITIVE SURGICAL. It trades about 0.03 of its total potential returns per unit of risk. INTUITIVE SURGICAL is currently generating about 0.08 per unit of volatility. If you would invest 25,600 in INTUITIVE SURGICAL on August 24, 2024 and sell it today you would earn a total of 25,650 from holding INTUITIVE SURGICAL or generate 100.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
NTG Nordic Transport vs. INTUITIVE SURGICAL
Performance |
| Timeline |
| NTG Nordic Transport |
| INTUITIVE SURGICAL |
NTG Nordic and INTUITIVE SURGICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NTG Nordic and INTUITIVE SURGICAL
The main advantage of trading using opposite NTG Nordic and INTUITIVE SURGICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NTG Nordic position performs unexpectedly, INTUITIVE SURGICAL 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 INTUITIVE SURGICAL will offset losses from the drop in INTUITIVE SURGICAL's long position.| NTG Nordic vs. SINGAPORE POST | NTG Nordic vs. Superior Plus Corp | NTG Nordic vs. NMI Holdings | NTG Nordic vs. Origin Agritech |
| INTUITIVE SURGICAL vs. PennantPark Investment | INTUITIVE SURGICAL vs. Lion One Metals | INTUITIVE SURGICAL vs. SLR Investment Corp | INTUITIVE SURGICAL vs. Apollo Investment Corp |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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