Correlation Between NTG Nordic and Moens Bank
Can any of the company-specific risk be diversified away by investing in both NTG Nordic and Moens Bank 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 Moens Bank 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 Moens Bank AS, you can compare the effects of market volatilities on NTG Nordic and Moens Bank 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 Moens Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of NTG Nordic and Moens Bank.
Diversification Opportunities for NTG Nordic and Moens Bank
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NTG and Moens is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding NTG Nordic Transport and Moens Bank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moens Bank 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 Moens Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moens Bank AS has no effect on the direction of NTG Nordic i.e., NTG Nordic and Moens Bank go up and down completely randomly.
Pair Corralation between NTG Nordic and Moens Bank
Assuming the 90 days trading horizon NTG Nordic Transport is expected to under-perform the Moens Bank. In addition to that, NTG Nordic is 2.04 times more volatile than Moens Bank AS. It trades about -0.03 of its total potential returns per unit of risk. Moens Bank AS is currently generating about 0.02 per unit of volatility. If you would invest 20,400 in Moens Bank AS on September 2, 2024 and sell it today you would earn a total of 1,200 from holding Moens Bank AS or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NTG Nordic Transport vs. Moens Bank AS
Performance |
| Timeline |
| NTG Nordic Transport |
| Moens Bank AS |
NTG Nordic and Moens Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NTG Nordic and Moens Bank
The main advantage of trading using opposite NTG Nordic and Moens Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NTG Nordic position performs unexpectedly, Moens Bank 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 Moens Bank will offset losses from the drop in Moens Bank's long position.The idea behind NTG Nordic Transport and Moens Bank AS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Moens Bank vs. Skjern Bank AS | Moens Bank vs. Lollands Bank | Moens Bank vs. Nordfyns Bank AS | Moens Bank vs. Groenlandsbanken 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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