Correlation Between NTG Nordic and URBAN OUTFITTERS
Can any of the company-specific risk be diversified away by investing in both NTG Nordic and URBAN OUTFITTERS 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 URBAN OUTFITTERS 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 URBAN OUTFITTERS, you can compare the effects of market volatilities on NTG Nordic and URBAN OUTFITTERS 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 URBAN OUTFITTERS. Check out your portfolio center. Please also check ongoing floating volatility patterns of NTG Nordic and URBAN OUTFITTERS.
Diversification Opportunities for NTG Nordic and URBAN OUTFITTERS
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between NTG and URBAN is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding NTG Nordic Transport and URBAN OUTFITTERS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on URBAN OUTFITTERS 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 URBAN OUTFITTERS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of URBAN OUTFITTERS has no effect on the direction of NTG Nordic i.e., NTG Nordic and URBAN OUTFITTERS go up and down completely randomly.
Pair Corralation between NTG Nordic and URBAN OUTFITTERS
Assuming the 90 days trading horizon NTG Nordic is expected to generate 2.07 times less return on investment than URBAN OUTFITTERS. In addition to that, NTG Nordic is 1.01 times more volatile than URBAN OUTFITTERS. It trades about 0.03 of its total potential returns per unit of risk. URBAN OUTFITTERS is currently generating about 0.05 per unit of volatility. If you would invest 2,643 in URBAN OUTFITTERS on September 3, 2024 and sell it today you would earn a total of 1,837 from holding URBAN OUTFITTERS or generate 69.5% 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. URBAN OUTFITTERS
Performance |
| Timeline |
| NTG Nordic Transport |
| URBAN OUTFITTERS |
NTG Nordic and URBAN OUTFITTERS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NTG Nordic and URBAN OUTFITTERS
The main advantage of trading using opposite NTG Nordic and URBAN OUTFITTERS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NTG Nordic position performs unexpectedly, URBAN OUTFITTERS 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 URBAN OUTFITTERS will offset losses from the drop in URBAN OUTFITTERS'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 |
| URBAN OUTFITTERS vs. DeVry Education Group | URBAN OUTFITTERS vs. Western Copper and | URBAN OUTFITTERS vs. Perseus Mining Limited | URBAN OUTFITTERS vs. GRIFFIN MINING LTD |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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