Correlation Between NTG Nordic and Stenocare
Can any of the company-specific risk be diversified away by investing in both NTG Nordic and Stenocare 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 Stenocare 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 Stenocare AS, you can compare the effects of market volatilities on NTG Nordic and Stenocare 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 Stenocare. Check out your portfolio center. Please also check ongoing floating volatility patterns of NTG Nordic and Stenocare.
Diversification Opportunities for NTG Nordic and Stenocare
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NTG and Stenocare is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding NTG Nordic Transport and Stenocare AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stenocare 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 Stenocare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stenocare AS has no effect on the direction of NTG Nordic i.e., NTG Nordic and Stenocare go up and down completely randomly.
Pair Corralation between NTG Nordic and Stenocare
Assuming the 90 days trading horizon NTG Nordic Transport is expected to under-perform the Stenocare. But the stock apears to be less risky and, when comparing its historical volatility, NTG Nordic Transport is 14.53 times less risky than Stenocare. The stock trades about -0.4 of its potential returns per unit of risk. The Stenocare AS is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 150.00 in Stenocare AS on October 7, 2024 and sell it today you would lose (29.00) from holding Stenocare AS or give up 19.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NTG Nordic Transport vs. Stenocare AS
Performance |
| Timeline |
| NTG Nordic Transport |
| Stenocare AS |
NTG Nordic and Stenocare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NTG Nordic and Stenocare
The main advantage of trading using opposite NTG Nordic and Stenocare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NTG Nordic position performs unexpectedly, Stenocare 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 Stenocare will offset losses from the drop in Stenocare's long position.| NTG Nordic vs. cBrain AS | NTG Nordic vs. Netcompany Group AS | NTG Nordic vs. ChemoMetec AS | NTG Nordic vs. NKT AS |
| Stenocare vs. Sparinvest INDEX Globale | Stenocare vs. Bavarian Nordic | Stenocare vs. Nordea Invest Global | Stenocare vs. Investeringsselskabet Luxor 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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