Correlation Between NTG Nordic and Danske Andelskassers
Can any of the company-specific risk be diversified away by investing in both NTG Nordic and Danske Andelskassers 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 Danske Andelskassers 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 Danske Andelskassers Bank, you can compare the effects of market volatilities on NTG Nordic and Danske Andelskassers 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 Danske Andelskassers. Check out your portfolio center. Please also check ongoing floating volatility patterns of NTG Nordic and Danske Andelskassers.
Diversification Opportunities for NTG Nordic and Danske Andelskassers
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NTG and Danske is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding NTG Nordic Transport and Danske Andelskassers Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danske Andelskassers Bank 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 Danske Andelskassers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danske Andelskassers Bank has no effect on the direction of NTG Nordic i.e., NTG Nordic and Danske Andelskassers go up and down completely randomly.
Pair Corralation between NTG Nordic and Danske Andelskassers
Assuming the 90 days trading horizon NTG Nordic Transport is expected to under-perform the Danske Andelskassers. But the stock apears to be less risky and, when comparing its historical volatility, NTG Nordic Transport is 2.03 times less risky than Danske Andelskassers. The stock trades about -0.52 of its potential returns per unit of risk. The Danske Andelskassers Bank is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,280 in Danske Andelskassers Bank on September 19, 2024 and sell it today you would earn a total of 90.00 from holding Danske Andelskassers Bank or generate 7.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NTG Nordic Transport vs. Danske Andelskassers Bank
Performance |
| Timeline |
| NTG Nordic Transport |
| Danske Andelskassers Bank |
NTG Nordic and Danske Andelskassers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NTG Nordic and Danske Andelskassers
The main advantage of trading using opposite NTG Nordic and Danske Andelskassers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NTG Nordic position performs unexpectedly, Danske Andelskassers 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 Danske Andelskassers will offset losses from the drop in Danske Andelskassers' long position.| NTG Nordic vs. cBrain AS | NTG Nordic vs. Netcompany Group AS | NTG Nordic vs. ChemoMetec AS | NTG Nordic vs. NKT AS |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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