Correlation Between NTG Nordic and SEALED AIR
Can any of the company-specific risk be diversified away by investing in both NTG Nordic and SEALED AIR 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 SEALED AIR 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 SEALED AIR , you can compare the effects of market volatilities on NTG Nordic and SEALED AIR 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 SEALED AIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of NTG Nordic and SEALED AIR.
Diversification Opportunities for NTG Nordic and SEALED AIR
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NTG and SEALED is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding NTG Nordic Transport and SEALED AIR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEALED AIR 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 SEALED AIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEALED AIR has no effect on the direction of NTG Nordic i.e., NTG Nordic and SEALED AIR go up and down completely randomly.
Pair Corralation between NTG Nordic and SEALED AIR
Assuming the 90 days trading horizon NTG Nordic Transport is expected to under-perform the SEALED AIR. In addition to that, NTG Nordic is 1.27 times more volatile than SEALED AIR . It trades about -0.03 of its total potential returns per unit of risk. SEALED AIR is currently generating about 0.01 per unit of volatility. If you would invest 3,518 in SEALED AIR on August 28, 2024 and sell it today you would lose (98.00) from holding SEALED AIR or give up 2.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.72% |
| Values | Daily Returns |
NTG Nordic Transport vs. SEALED AIR
Performance |
| Timeline |
| NTG Nordic Transport |
| SEALED AIR |
NTG Nordic and SEALED AIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NTG Nordic and SEALED AIR
The main advantage of trading using opposite NTG Nordic and SEALED AIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NTG Nordic position performs unexpectedly, SEALED AIR 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 SEALED AIR will offset losses from the drop in SEALED AIR's long position.| NTG Nordic vs. Lifeway Foods | NTG Nordic vs. PT Indofood Sukses | NTG Nordic vs. TreeHouse Foods | NTG Nordic vs. ADRIATIC METALS LS 013355 |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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