Correlation Between Nordic Waterproofing and Ctek AB
Can any of the company-specific risk be diversified away by investing in both Nordic Waterproofing and Ctek AB 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 Nordic Waterproofing and Ctek AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nordic Waterproofing Holding and Ctek AB, you can compare the effects of market volatilities on Nordic Waterproofing and Ctek AB 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 Nordic Waterproofing with a short position of Ctek AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Waterproofing and Ctek AB.
Diversification Opportunities for Nordic Waterproofing and Ctek AB
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nordic and Ctek is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Waterproofing Holding and Ctek AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ctek AB and Nordic Waterproofing 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 Nordic Waterproofing Holding are associated (or correlated) with Ctek AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ctek AB has no effect on the direction of Nordic Waterproofing i.e., Nordic Waterproofing and Ctek AB go up and down completely randomly.
Pair Corralation between Nordic Waterproofing and Ctek AB
Assuming the 90 days trading horizon Nordic Waterproofing Holding is expected to generate 1.59 times more return on investment than Ctek AB. However, Nordic Waterproofing is 1.59 times more volatile than Ctek AB. It trades about 0.14 of its potential returns per unit of risk. Ctek AB is currently generating about -0.16 per unit of risk. If you would invest 16,100 in Nordic Waterproofing Holding on August 24, 2024 and sell it today you would earn a total of 1,460 from holding Nordic Waterproofing Holding or generate 9.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordic Waterproofing Holding vs. Ctek AB
Performance |
| Timeline |
| Nordic Waterproofing |
| Ctek AB |
Nordic Waterproofing and Ctek AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Waterproofing and Ctek AB
The main advantage of trading using opposite Nordic Waterproofing and Ctek AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Waterproofing position performs unexpectedly, Ctek AB 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 Ctek AB will offset losses from the drop in Ctek AB's long position.| Nordic Waterproofing vs. Bufab Holding AB | Nordic Waterproofing vs. Garo AB | Nordic Waterproofing vs. Inwido AB | Nordic Waterproofing vs. CTT Systems AB |
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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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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