Correlation Between NTG Nordic and Japan Medical
Can any of the company-specific risk be diversified away by investing in both NTG Nordic and Japan Medical 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 Japan Medical 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 Japan Medical Dynamic, you can compare the effects of market volatilities on NTG Nordic and Japan Medical 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 Japan Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of NTG Nordic and Japan Medical.
Diversification Opportunities for NTG Nordic and Japan Medical
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NTG and Japan is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding NTG Nordic Transport and Japan Medical Dynamic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan Medical Dynamic 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 Japan Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Japan Medical Dynamic has no effect on the direction of NTG Nordic i.e., NTG Nordic and Japan Medical go up and down completely randomly.
Pair Corralation between NTG Nordic and Japan Medical
Assuming the 90 days trading horizon NTG Nordic is expected to generate 1.26 times less return on investment than Japan Medical. In addition to that, NTG Nordic is 1.07 times more volatile than Japan Medical Dynamic. It trades about 0.11 of its total potential returns per unit of risk. Japan Medical Dynamic is currently generating about 0.15 per unit of volatility. If you would invest 368.00 in Japan Medical Dynamic on September 1, 2024 and sell it today you would earn a total of 16.00 from holding Japan Medical Dynamic or generate 4.35% 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. Japan Medical Dynamic
Performance |
| Timeline |
| NTG Nordic Transport |
| Japan Medical Dynamic |
NTG Nordic and Japan Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NTG Nordic and Japan Medical
The main advantage of trading using opposite NTG Nordic and Japan Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NTG Nordic position performs unexpectedly, Japan Medical 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 Japan Medical will offset losses from the drop in Japan Medical's long position.| NTG Nordic vs. Superior Plus Corp | NTG Nordic vs. NMI Holdings | NTG Nordic vs. Origin Agritech | NTG Nordic vs. SIVERS SEMICONDUCTORS AB |
| Japan Medical vs. Stryker | Japan Medical vs. Superior Plus Corp | Japan Medical vs. NMI Holdings | Japan Medical vs. Origin Agritech |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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