Correlation Between NTG Nordic and RETAIL FOOD
Can any of the company-specific risk be diversified away by investing in both NTG Nordic and RETAIL FOOD 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 RETAIL FOOD 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 RETAIL FOOD GROUP, you can compare the effects of market volatilities on NTG Nordic and RETAIL FOOD 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 RETAIL FOOD. Check out your portfolio center. Please also check ongoing floating volatility patterns of NTG Nordic and RETAIL FOOD.
Diversification Opportunities for NTG Nordic and RETAIL FOOD
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NTG and RETAIL is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding NTG Nordic Transport and RETAIL FOOD GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RETAIL FOOD GROUP 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 RETAIL FOOD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RETAIL FOOD GROUP has no effect on the direction of NTG Nordic i.e., NTG Nordic and RETAIL FOOD go up and down completely randomly.
Pair Corralation between NTG Nordic and RETAIL FOOD
Assuming the 90 days trading horizon NTG Nordic Transport is expected to generate 0.86 times more return on investment than RETAIL FOOD. However, NTG Nordic Transport is 1.16 times less risky than RETAIL FOOD. It trades about 0.01 of its potential returns per unit of risk. RETAIL FOOD GROUP is currently generating about -0.02 per unit of risk. If you would invest 3,490 in NTG Nordic Transport on October 11, 2024 and sell it today you would lose (40.00) from holding NTG Nordic Transport or give up 1.15% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
NTG Nordic Transport vs. RETAIL FOOD GROUP
Performance |
Timeline |
NTG Nordic Transport |
RETAIL FOOD GROUP |
NTG Nordic and RETAIL FOOD Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with NTG Nordic and RETAIL FOOD
The main advantage of trading using opposite NTG Nordic and RETAIL FOOD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NTG Nordic position performs unexpectedly, RETAIL FOOD 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 RETAIL FOOD will offset losses from the drop in RETAIL FOOD's long position.NTG Nordic vs. PENN NATL GAMING | NTG Nordic vs. Solstad Offshore ASA | NTG Nordic vs. International Game Technology | NTG Nordic vs. Hyatt Hotels |
RETAIL FOOD vs. NTG Nordic Transport | RETAIL FOOD vs. FIREWEED METALS P | RETAIL FOOD vs. Columbia Sportswear | RETAIL FOOD vs. Jacquet Metal Service |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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