Correlation Between NTG Nordic and BJs Restaurants
Can any of the company-specific risk be diversified away by investing in both NTG Nordic and BJs Restaurants 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 BJs Restaurants 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 BJs Restaurants, you can compare the effects of market volatilities on NTG Nordic and BJs Restaurants 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 BJs Restaurants. Check out your portfolio center. Please also check ongoing floating volatility patterns of NTG Nordic and BJs Restaurants.
Diversification Opportunities for NTG Nordic and BJs Restaurants
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NTG and BJs is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding NTG Nordic Transport and BJs Restaurants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BJs Restaurants 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 BJs Restaurants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BJs Restaurants has no effect on the direction of NTG Nordic i.e., NTG Nordic and BJs Restaurants go up and down completely randomly.
Pair Corralation between NTG Nordic and BJs Restaurants
Assuming the 90 days trading horizon NTG Nordic is expected to generate 1.79 times less return on investment than BJs Restaurants. But when comparing it to its historical volatility, NTG Nordic Transport is 2.34 times less risky than BJs Restaurants. It trades about 0.11 of its potential returns per unit of risk. BJs Restaurants is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3,400 in BJs Restaurants on September 1, 2024 and sell it today you would earn a total of 180.00 from holding BJs Restaurants or generate 5.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NTG Nordic Transport vs. BJs Restaurants
Performance |
| Timeline |
| NTG Nordic Transport |
| BJs Restaurants |
NTG Nordic and BJs Restaurants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NTG Nordic and BJs Restaurants
The main advantage of trading using opposite NTG Nordic and BJs Restaurants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NTG Nordic position performs unexpectedly, BJs Restaurants 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 BJs Restaurants will offset losses from the drop in BJs Restaurants' long position.| NTG Nordic vs. Superior Plus Corp | NTG Nordic vs. NMI Holdings | NTG Nordic vs. Origin Agritech | NTG Nordic vs. SIVERS SEMICONDUCTORS AB |
| BJs Restaurants vs. HEMISPHERE EGY | BJs Restaurants vs. KRISPY KREME DL 01 | BJs Restaurants vs. ADRIATIC METALS LS 013355 | BJs Restaurants vs. Cogent Communications Holdings |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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