Correlation Between NTG Nordic and Bank of China Limited
Can any of the company-specific risk be diversified away by investing in both NTG Nordic and Bank of China Limited 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 Bank of China Limited 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 Bank of China, you can compare the effects of market volatilities on NTG Nordic and Bank of China Limited 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 Bank of China Limited. Check out your portfolio center. Please also check ongoing floating volatility patterns of NTG Nordic and Bank of China Limited.
Diversification Opportunities for NTG Nordic and Bank of China Limited
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NTG and Bank is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding NTG Nordic Transport and Bank of China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of China Limited 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 Bank of China Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of China Limited has no effect on the direction of NTG Nordic i.e., NTG Nordic and Bank of China Limited go up and down completely randomly.
Pair Corralation between NTG Nordic and Bank of China Limited
Assuming the 90 days trading horizon NTG Nordic Transport is expected to under-perform the Bank of China Limited. But the stock apears to be less risky and, when comparing its historical volatility, NTG Nordic Transport is 3.03 times less risky than Bank of China Limited. The stock trades about -0.05 of its potential returns per unit of risk. The Bank of China is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 37.00 in Bank of China on November 30, 2024 and sell it today you would earn a total of 17.00 from holding Bank of China or generate 45.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NTG Nordic Transport vs. Bank of China
Performance |
| Timeline |
| NTG Nordic Transport |
| Bank of China Limited |
NTG Nordic and Bank of China Limited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NTG Nordic and Bank of China Limited
The main advantage of trading using opposite NTG Nordic and Bank of China Limited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NTG Nordic position performs unexpectedly, Bank of China Limited 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 Bank of China Limited will offset losses from the drop in Bank of China Limited's long position.| NTG Nordic vs. SmarTone Telecommunications Holdings | NTG Nordic vs. Cairo Communication SpA | NTG Nordic vs. CHINA TELECOM H | NTG Nordic vs. CITIC Telecom International |
| Bank of China Limited vs. Playa Hotels Resorts | Bank of China Limited vs. ANTA Sports Products | Bank of China Limited vs. GUILD ESPORTS PLC | Bank of China Limited vs. SQUIRREL MEDIA SA |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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