Correlation Between NTG Nordic and BankInvest Optima
Can any of the company-specific risk be diversified away by investing in both NTG Nordic and BankInvest Optima 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 BankInvest Optima 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 BankInvest Optima 10, you can compare the effects of market volatilities on NTG Nordic and BankInvest Optima 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 BankInvest Optima. Check out your portfolio center. Please also check ongoing floating volatility patterns of NTG Nordic and BankInvest Optima.
Diversification Opportunities for NTG Nordic and BankInvest Optima
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NTG and BankInvest is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding NTG Nordic Transport and BankInvest Optima 10 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BankInvest Optima 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 BankInvest Optima. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BankInvest Optima has no effect on the direction of NTG Nordic i.e., NTG Nordic and BankInvest Optima go up and down completely randomly.
Pair Corralation between NTG Nordic and BankInvest Optima
Assuming the 90 days trading horizon NTG Nordic Transport is expected to generate 7.5 times more return on investment than BankInvest Optima. However, NTG Nordic is 7.5 times more volatile than BankInvest Optima 10. It trades about 0.02 of its potential returns per unit of risk. BankInvest Optima 10 is currently generating about 0.14 per unit of risk. If you would invest 25,200 in NTG Nordic Transport on August 29, 2024 and sell it today you would earn a total of 3,400 from holding NTG Nordic Transport or generate 13.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 60.28% |
| Values | Daily Returns |
NTG Nordic Transport vs. BankInvest Optima 10
Performance |
| Timeline |
| NTG Nordic Transport |
| BankInvest Optima |
NTG Nordic and BankInvest Optima Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NTG Nordic and BankInvest Optima
The main advantage of trading using opposite NTG Nordic and BankInvest Optima positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NTG Nordic position performs unexpectedly, BankInvest Optima 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 BankInvest Optima will offset losses from the drop in BankInvest Optima's long position.| NTG Nordic vs. cBrain AS | NTG Nordic vs. Netcompany Group AS | NTG Nordic vs. ChemoMetec AS | NTG Nordic vs. NKT AS |
| BankInvest Optima vs. PARKEN Sport Entertainment | BankInvest Optima vs. NTG Nordic Transport | BankInvest Optima vs. Nordfyns Bank AS | BankInvest Optima vs. BankIn Bredygt Klimaakt |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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