Correlation Between NTG Nordic and Twilio
Can any of the company-specific risk be diversified away by investing in both NTG Nordic and Twilio 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 Twilio 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 Twilio Inc, you can compare the effects of market volatilities on NTG Nordic and Twilio 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 Twilio. Check out your portfolio center. Please also check ongoing floating volatility patterns of NTG Nordic and Twilio.
Diversification Opportunities for NTG Nordic and Twilio
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between NTG and Twilio is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding NTG Nordic Transport and Twilio Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Twilio Inc 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 Twilio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Twilio Inc has no effect on the direction of NTG Nordic i.e., NTG Nordic and Twilio go up and down completely randomly.
Pair Corralation between NTG Nordic and Twilio
Assuming the 90 days trading horizon NTG Nordic Transport is expected to under-perform the Twilio. But the stock apears to be less risky and, when comparing its historical volatility, NTG Nordic Transport is 2.0 times less risky than Twilio. The stock trades about -0.06 of its potential returns per unit of risk. The Twilio Inc is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest 7,723 in Twilio Inc on September 3, 2024 and sell it today you would earn a total of 2,017 from holding Twilio Inc or generate 26.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NTG Nordic Transport vs. Twilio Inc
Performance |
| Timeline |
| NTG Nordic Transport |
| Twilio Inc |
NTG Nordic and Twilio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NTG Nordic and Twilio
The main advantage of trading using opposite NTG Nordic and Twilio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NTG Nordic position performs unexpectedly, Twilio 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 Twilio will offset losses from the drop in Twilio's long position.| NTG Nordic vs. Kuehne Nagel International | NTG Nordic vs. ZTO EXPRESS | NTG Nordic vs. Superior Plus Corp | NTG Nordic vs. NMI Holdings |
| Twilio vs. KINGBOARD CHEMICAL | Twilio vs. Mitsubishi Gas Chemical | Twilio vs. X FAB Silicon Foundries | Twilio vs. Nordic Semiconductor ASA |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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