Correlation Between NTG Nordic and Erria AS
Can any of the company-specific risk be diversified away by investing in both NTG Nordic and Erria AS 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 Erria AS 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 Erria AS, you can compare the effects of market volatilities on NTG Nordic and Erria AS 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 Erria AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of NTG Nordic and Erria AS.
Diversification Opportunities for NTG Nordic and Erria AS
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NTG and Erria is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding NTG Nordic Transport and Erria AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Erria AS 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 Erria AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Erria AS has no effect on the direction of NTG Nordic i.e., NTG Nordic and Erria AS go up and down completely randomly.
Pair Corralation between NTG Nordic and Erria AS
Assuming the 90 days trading horizon NTG Nordic Transport is expected to under-perform the Erria AS. But the stock apears to be less risky and, when comparing its historical volatility, NTG Nordic Transport is 2.63 times less risky than Erria AS. The stock trades about -0.47 of its potential returns per unit of risk. The Erria AS is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 310.00 in Erria AS on September 15, 2024 and sell it today you would lose (2.00) from holding Erria AS or give up 0.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
NTG Nordic Transport vs. Erria AS
Performance |
| Timeline |
| NTG Nordic Transport |
| Erria AS |
NTG Nordic and Erria AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NTG Nordic and Erria AS
The main advantage of trading using opposite NTG Nordic and Erria AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NTG Nordic position performs unexpectedly, Erria AS 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 Erria AS will offset losses from the drop in Erria AS's long position.| NTG Nordic vs. cBrain AS | NTG Nordic vs. Netcompany Group AS | NTG Nordic vs. ChemoMetec AS | NTG Nordic vs. NKT AS |
| Erria AS vs. NTG Nordic Transport | Erria AS vs. Prime Office AS | Erria AS vs. Laan Spar Bank | Erria AS vs. Alefarm Brewing AS |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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