Correlation Between NTG Nordic and Spar Nord
Can any of the company-specific risk be diversified away by investing in both NTG Nordic and Spar Nord 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 Spar Nord 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 Spar Nord Bank, you can compare the effects of market volatilities on NTG Nordic and Spar Nord 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 Spar Nord. Check out your portfolio center. Please also check ongoing floating volatility patterns of NTG Nordic and Spar Nord.
Diversification Opportunities for NTG Nordic and Spar Nord
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NTG and Spar is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding NTG Nordic Transport and Spar Nord Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spar Nord Bank 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 Spar Nord. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spar Nord Bank has no effect on the direction of NTG Nordic i.e., NTG Nordic and Spar Nord go up and down completely randomly.
Pair Corralation between NTG Nordic and Spar Nord
Assuming the 90 days trading horizon NTG Nordic Transport is expected to under-perform the Spar Nord. But the stock apears to be less risky and, when comparing its historical volatility, NTG Nordic Transport is 1.03 times less risky than Spar Nord. The stock trades about -0.06 of its potential returns per unit of risk. The Spar Nord Bank is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 13,260 in Spar Nord Bank on September 3, 2024 and sell it today you would earn a total of 660.00 from holding Spar Nord Bank or generate 4.98% 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. Spar Nord Bank
Performance |
| Timeline |
| NTG Nordic Transport |
| Spar Nord Bank |
NTG Nordic and Spar Nord Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NTG Nordic and Spar Nord
The main advantage of trading using opposite NTG Nordic and Spar Nord positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NTG Nordic position performs unexpectedly, Spar Nord 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 Spar Nord will offset losses from the drop in Spar Nord's long position.| NTG Nordic vs. cBrain AS | NTG Nordic vs. Netcompany Group AS | NTG Nordic vs. ChemoMetec AS | NTG Nordic vs. NKT AS |
| Spar Nord vs. FLSmidth Co | Spar Nord vs. Danske Bank AS | Spar Nord vs. ISS AS | Spar Nord vs. DSV Panalpina 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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