Correlation Between NTG Nordic and Scandinavian Medical
Can any of the company-specific risk be diversified away by investing in both NTG Nordic and Scandinavian Medical 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 Scandinavian Medical 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 Scandinavian Medical Solutions, you can compare the effects of market volatilities on NTG Nordic and Scandinavian Medical 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 Scandinavian Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of NTG Nordic and Scandinavian Medical.
Diversification Opportunities for NTG Nordic and Scandinavian Medical
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NTG and Scandinavian is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding NTG Nordic Transport and Scandinavian Medical Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandinavian Medical 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 Scandinavian Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scandinavian Medical has no effect on the direction of NTG Nordic i.e., NTG Nordic and Scandinavian Medical go up and down completely randomly.
Pair Corralation between NTG Nordic and Scandinavian Medical
Assuming the 90 days trading horizon NTG Nordic Transport is expected to generate 0.79 times more return on investment than Scandinavian Medical. However, NTG Nordic Transport is 1.27 times less risky than Scandinavian Medical. It trades about -0.03 of its potential returns per unit of risk. Scandinavian Medical Solutions is currently generating about -0.04 per unit of risk. If you would invest 28,900 in NTG Nordic Transport on November 9, 2024 and sell it today you would lose (5,550) from holding NTG Nordic Transport or give up 19.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NTG Nordic Transport vs. Scandinavian Medical Solutions
Performance |
| Timeline |
| NTG Nordic Transport |
| Scandinavian Medical |
NTG Nordic and Scandinavian Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NTG Nordic and Scandinavian Medical
The main advantage of trading using opposite NTG Nordic and Scandinavian Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NTG Nordic position performs unexpectedly, Scandinavian Medical 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 Scandinavian Medical will offset losses from the drop in Scandinavian Medical's long position.| NTG Nordic vs. cBrain AS | NTG Nordic vs. Netcompany Group AS | NTG Nordic vs. ChemoMetec AS | NTG Nordic vs. NKT AS |
| Scandinavian Medical vs. Lollands Bank | Scandinavian Medical vs. Strategic Investments AS | Scandinavian Medical vs. Moens Bank AS | Scandinavian Medical vs. PARKEN Sport Entertainment |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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