Correlation Between NTG Nordic and Carnegie Wealth
Can any of the company-specific risk be diversified away by investing in both NTG Nordic and Carnegie Wealth 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 Carnegie Wealth 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 Carnegie Wealth Management, you can compare the effects of market volatilities on NTG Nordic and Carnegie Wealth 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 Carnegie Wealth. Check out your portfolio center. Please also check ongoing floating volatility patterns of NTG Nordic and Carnegie Wealth.
Diversification Opportunities for NTG Nordic and Carnegie Wealth
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between NTG and Carnegie is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding NTG Nordic Transport and Carnegie Wealth Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carnegie Wealth Mana 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 Carnegie Wealth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carnegie Wealth Mana has no effect on the direction of NTG Nordic i.e., NTG Nordic and Carnegie Wealth go up and down completely randomly.
Pair Corralation between NTG Nordic and Carnegie Wealth
Assuming the 90 days trading horizon NTG Nordic Transport is expected to under-perform the Carnegie Wealth. In addition to that, NTG Nordic is 1.24 times more volatile than Carnegie Wealth Management. It trades about -0.06 of its total potential returns per unit of risk. Carnegie Wealth Management is currently generating about -0.03 per unit of volatility. If you would invest 12,660 in Carnegie Wealth Management on September 3, 2024 and sell it today you would lose (90.00) from holding Carnegie Wealth Management or give up 0.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NTG Nordic Transport vs. Carnegie Wealth Management
Performance |
| Timeline |
| NTG Nordic Transport |
| Carnegie Wealth Mana |
NTG Nordic and Carnegie Wealth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NTG Nordic and Carnegie Wealth
The main advantage of trading using opposite NTG Nordic and Carnegie Wealth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NTG Nordic position performs unexpectedly, Carnegie Wealth 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 Carnegie Wealth will offset losses from the drop in Carnegie Wealth's long position.| NTG Nordic vs. cBrain AS | NTG Nordic vs. Netcompany Group AS | NTG Nordic vs. ChemoMetec AS | NTG Nordic vs. NKT AS |
| Carnegie Wealth vs. Novo Nordisk AS | Carnegie Wealth vs. Nordea Bank Abp | Carnegie Wealth vs. DSV Panalpina AS | Carnegie Wealth vs. AP Mller |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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