Correlation Between NTG Nordic and IA Invest
Can any of the company-specific risk be diversified away by investing in both NTG Nordic and IA Invest 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 IA Invest 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 IA Invest Peruma, you can compare the effects of market volatilities on NTG Nordic and IA Invest 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 IA Invest. Check out your portfolio center. Please also check ongoing floating volatility patterns of NTG Nordic and IA Invest.
Diversification Opportunities for NTG Nordic and IA Invest
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between NTG and IAIPGA is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding NTG Nordic Transport and IA Invest Peruma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IA Invest Peruma 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 IA Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IA Invest Peruma has no effect on the direction of NTG Nordic i.e., NTG Nordic and IA Invest go up and down completely randomly.
Pair Corralation between NTG Nordic and IA Invest
Assuming the 90 days trading horizon NTG Nordic Transport is expected to under-perform the IA Invest. But the stock apears to be less risky and, when comparing its historical volatility, NTG Nordic Transport is 1.46 times less risky than IA Invest. The stock trades about -0.48 of its potential returns per unit of risk. The IA Invest Peruma is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 13,635 in IA Invest Peruma on September 29, 2024 and sell it today you would lose (30.00) from holding IA Invest Peruma or give up 0.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 73.68% |
| Values | Daily Returns |
NTG Nordic Transport vs. IA Invest Peruma
Performance |
| Timeline |
| NTG Nordic Transport |
| IA Invest Peruma |
NTG Nordic and IA Invest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NTG Nordic and IA Invest
The main advantage of trading using opposite NTG Nordic and IA Invest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NTG Nordic position performs unexpectedly, IA Invest 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 IA Invest will offset losses from the drop in IA Invest's long position.| NTG Nordic vs. Orsted AS | NTG Nordic vs. Danske Bank AS | NTG Nordic vs. Bavarian Nordic | NTG Nordic vs. AP Mller |
| IA Invest vs. BankInvest Value Globale | IA Invest vs. Scandinavian Medical Solutions | IA Invest vs. NTG Nordic Transport | IA Invest vs. Moens Bank 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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