Correlation Between NTG Nordic and PEPKOR
Can any of the company-specific risk be diversified away by investing in both NTG Nordic and PEPKOR 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 PEPKOR 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 PEPKOR LTD, you can compare the effects of market volatilities on NTG Nordic and PEPKOR 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 PEPKOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of NTG Nordic and PEPKOR.
Diversification Opportunities for NTG Nordic and PEPKOR
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between NTG and PEPKOR is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding NTG Nordic Transport and PEPKOR LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PEPKOR LTD 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 PEPKOR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PEPKOR LTD has no effect on the direction of NTG Nordic i.e., NTG Nordic and PEPKOR go up and down completely randomly.
Pair Corralation between NTG Nordic and PEPKOR
Assuming the 90 days trading horizon NTG Nordic is expected to generate 6.79 times less return on investment than PEPKOR. But when comparing it to its historical volatility, NTG Nordic Transport is 2.61 times less risky than PEPKOR. It trades about 0.03 of its potential returns per unit of risk. PEPKOR LTD is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 25.00 in PEPKOR LTD on September 13, 2024 and sell it today you would earn a total of 125.00 from holding PEPKOR LTD or generate 500.0% 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. PEPKOR LTD
Performance |
| Timeline |
| NTG Nordic Transport |
| PEPKOR LTD |
NTG Nordic and PEPKOR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NTG Nordic and PEPKOR
The main advantage of trading using opposite NTG Nordic and PEPKOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NTG Nordic position performs unexpectedly, PEPKOR 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 PEPKOR will offset losses from the drop in PEPKOR's 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 |
| PEPKOR vs. Schweizer Electronic AG | PEPKOR vs. Electronic Arts | PEPKOR vs. BII Railway Transportation | PEPKOR vs. STORE ELECTRONIC |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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