Correlation Between NTG Nordic and Nnit AS
Can any of the company-specific risk be diversified away by investing in both NTG Nordic and Nnit 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 Nnit 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 Nnit AS, you can compare the effects of market volatilities on NTG Nordic and Nnit 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 Nnit AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of NTG Nordic and Nnit AS.
Diversification Opportunities for NTG Nordic and Nnit AS
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NTG and Nnit is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding NTG Nordic Transport and Nnit AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nnit 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 Nnit AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nnit AS has no effect on the direction of NTG Nordic i.e., NTG Nordic and Nnit AS go up and down completely randomly.
Pair Corralation between NTG Nordic and Nnit AS
Assuming the 90 days trading horizon NTG Nordic Transport is expected to generate 0.69 times more return on investment than Nnit AS. However, NTG Nordic Transport is 1.44 times less risky than Nnit AS. It trades about 0.09 of its potential returns per unit of risk. Nnit AS is currently generating about -0.23 per unit of risk. If you would invest 27,750 in NTG Nordic Transport on September 1, 2024 and sell it today you would earn a total of 750.00 from holding NTG Nordic Transport or generate 2.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NTG Nordic Transport vs. Nnit AS
Performance |
| Timeline |
| NTG Nordic Transport |
| Nnit AS |
NTG Nordic and Nnit AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NTG Nordic and Nnit AS
The main advantage of trading using opposite NTG Nordic and Nnit AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NTG Nordic position performs unexpectedly, Nnit 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 Nnit AS will offset losses from the drop in Nnit 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 |
| Nnit AS vs. Lollands Bank | Nnit AS vs. Carnegie Wealth Management | Nnit AS vs. Dataproces Group AS | Nnit AS vs. Kreditbanken 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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