Correlation Between NTG Nordic and SCOTT TECHNOLOGY
Can any of the company-specific risk be diversified away by investing in both NTG Nordic and SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY, you can compare the effects of market volatilities on NTG Nordic and SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of NTG Nordic and SCOTT TECHNOLOGY.
Diversification Opportunities for NTG Nordic and SCOTT TECHNOLOGY
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NTG and SCOTT is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding NTG Nordic Transport and SCOTT TECHNOLOGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCOTT TECHNOLOGY has no effect on the direction of NTG Nordic i.e., NTG Nordic and SCOTT TECHNOLOGY go up and down completely randomly.
Pair Corralation between NTG Nordic and SCOTT TECHNOLOGY
Assuming the 90 days trading horizon NTG Nordic Transport is expected to under-perform the SCOTT TECHNOLOGY. But the stock apears to be less risky and, when comparing its historical volatility, NTG Nordic Transport is 2.16 times less risky than SCOTT TECHNOLOGY. The stock trades about -0.06 of its potential returns per unit of risk. The SCOTT TECHNOLOGY is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 99.00 in SCOTT TECHNOLOGY on August 29, 2024 and sell it today you would earn a total of 29.00 from holding SCOTT TECHNOLOGY or generate 29.29% 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. SCOTT TECHNOLOGY
Performance |
| Timeline |
| NTG Nordic Transport |
| SCOTT TECHNOLOGY |
NTG Nordic and SCOTT TECHNOLOGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NTG Nordic and SCOTT TECHNOLOGY
The main advantage of trading using opposite NTG Nordic and SCOTT TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NTG Nordic position performs unexpectedly, SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY will offset losses from the drop in SCOTT TECHNOLOGY's long position.| NTG Nordic vs. Superior Plus Corp | NTG Nordic vs. NMI Holdings | NTG Nordic vs. SIVERS SEMICONDUCTORS AB | NTG Nordic vs. Talanx AG |
| SCOTT TECHNOLOGY vs. Apple Inc | SCOTT TECHNOLOGY vs. Apple Inc | SCOTT TECHNOLOGY vs. Superior Plus Corp | SCOTT TECHNOLOGY vs. SIVERS SEMICONDUCTORS AB |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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