Correlation Between NTG Nordic and SENECA FOODS-A
Can any of the company-specific risk be diversified away by investing in both NTG Nordic and SENECA FOODS-A 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 SENECA FOODS-A 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 SENECA FOODS A, you can compare the effects of market volatilities on NTG Nordic and SENECA FOODS-A 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 SENECA FOODS-A. Check out your portfolio center. Please also check ongoing floating volatility patterns of NTG Nordic and SENECA FOODS-A.
Diversification Opportunities for NTG Nordic and SENECA FOODS-A
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NTG and SENECA is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding NTG Nordic Transport and SENECA FOODS A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SENECA FOODS A 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 SENECA FOODS-A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SENECA FOODS A has no effect on the direction of NTG Nordic i.e., NTG Nordic and SENECA FOODS-A go up and down completely randomly.
Pair Corralation between NTG Nordic and SENECA FOODS-A
Assuming the 90 days trading horizon NTG Nordic is expected to generate 3.54 times less return on investment than SENECA FOODS-A. But when comparing it to its historical volatility, NTG Nordic Transport is 1.14 times less risky than SENECA FOODS-A. It trades about 0.01 of its potential returns per unit of risk. SENECA FOODS A is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 5,400 in SENECA FOODS A on October 13, 2024 and sell it today you would earn a total of 1,650 from holding SENECA FOODS A or generate 30.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NTG Nordic Transport vs. SENECA FOODS A
Performance |
| Timeline |
| NTG Nordic Transport |
| SENECA FOODS A |
NTG Nordic and SENECA FOODS-A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NTG Nordic and SENECA FOODS-A
The main advantage of trading using opposite NTG Nordic and SENECA FOODS-A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NTG Nordic position performs unexpectedly, SENECA FOODS-A 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 SENECA FOODS-A will offset losses from the drop in SENECA FOODS-A's long position.| NTG Nordic vs. ecotel communication ag | NTG Nordic vs. GREENX METALS LTD | NTG Nordic vs. Forsys Metals Corp | NTG Nordic vs. Zijin Mining Group |
| SENECA FOODS-A vs. PLAYMATES TOYS | SENECA FOODS-A vs. CarsalesCom | SENECA FOODS-A vs. Hochschild Mining plc | SENECA FOODS-A vs. QINGCI GAMES INC |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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