Correlation Between Novotek AB and Cint Group
Can any of the company-specific risk be diversified away by investing in both Novotek AB and Cint Group 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 Novotek AB and Cint Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Novotek AB and Cint Group AB, you can compare the effects of market volatilities on Novotek AB and Cint Group 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 Novotek AB with a short position of Cint Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Novotek AB and Cint Group.
Diversification Opportunities for Novotek AB and Cint Group
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Novotek and Cint is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Novotek AB and Cint Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cint Group AB and Novotek AB 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 Novotek AB are associated (or correlated) with Cint Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cint Group AB has no effect on the direction of Novotek AB i.e., Novotek AB and Cint Group go up and down completely randomly.
Pair Corralation between Novotek AB and Cint Group
Assuming the 90 days trading horizon Novotek AB is expected to generate 0.47 times more return on investment than Cint Group. However, Novotek AB is 2.11 times less risky than Cint Group. It trades about 0.06 of its potential returns per unit of risk. Cint Group AB is currently generating about -0.02 per unit of risk. If you would invest 4,154 in Novotek AB on September 25, 2024 and sell it today you would earn a total of 3,026 from holding Novotek AB or generate 72.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Novotek AB vs. Cint Group AB
Performance |
| Timeline |
| Novotek AB |
| Cint Group AB |
Novotek AB and Cint Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Novotek AB and Cint Group
The main advantage of trading using opposite Novotek AB and Cint Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Novotek AB position performs unexpectedly, Cint Group 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 Cint Group will offset losses from the drop in Cint Group's long position.| Novotek AB vs. FormPipe Software AB | Novotek AB vs. Micro Systemation AB | Novotek AB vs. CTT Systems AB | Novotek AB vs. CAG Group AB |
| Cint Group vs. FormPipe Software AB | Cint Group vs. MOBA Network publ | Cint Group vs. Exsitec Holding AB | Cint Group vs. Novotek AB |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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