Correlation Between Nortech Systems and Intergroup
Can any of the company-specific risk be diversified away by investing in both Nortech Systems and Intergroup 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 Nortech Systems and Intergroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nortech Systems Incorporated and The Intergroup, you can compare the effects of market volatilities on Nortech Systems and Intergroup 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 Nortech Systems with a short position of Intergroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nortech Systems and Intergroup.
Diversification Opportunities for Nortech Systems and Intergroup
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Nortech and Intergroup is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Nortech Systems Incorporated and The Intergroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intergroup and Nortech Systems 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 Nortech Systems Incorporated are associated (or correlated) with Intergroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intergroup has no effect on the direction of Nortech Systems i.e., Nortech Systems and Intergroup go up and down completely randomly.
Pair Corralation between Nortech Systems and Intergroup
Given the investment horizon of 90 days Nortech Systems Incorporated is expected to under-perform the Intergroup. In addition to that, Nortech Systems is 2.77 times more volatile than The Intergroup. It trades about -0.13 of its total potential returns per unit of risk. The Intergroup is currently generating about -0.1 per unit of volatility. If you would invest 1,452 in The Intergroup on August 29, 2024 and sell it today you would lose (45.00) from holding The Intergroup or give up 3.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Nortech Systems Incorporated vs. The Intergroup
Performance |
| Timeline |
| Nortech Systems |
| Intergroup |
Nortech Systems and Intergroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nortech Systems and Intergroup
The main advantage of trading using opposite Nortech Systems and Intergroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nortech Systems position performs unexpectedly, Intergroup 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 Intergroup will offset losses from the drop in Intergroup's long position.| Nortech Systems vs. Neuropace | Nortech Systems vs. Electromed | Nortech Systems vs. Orthopediatrics Corp | Nortech Systems vs. SurModics |
| Intergroup vs. Huazhu Group | Intergroup vs. Atour Lifestyle Holdings | Intergroup vs. LuxUrban Hotels | Intergroup vs. InterContinental Hotels Group |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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