Correlation Between Ringkjoebing Landbobank and NTG Nordic
Can any of the company-specific risk be diversified away by investing in both Ringkjoebing Landbobank and NTG Nordic 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 Ringkjoebing Landbobank and NTG Nordic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ringkjoebing Landbobank AS and NTG Nordic Transport, you can compare the effects of market volatilities on Ringkjoebing Landbobank and NTG Nordic 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 Ringkjoebing Landbobank with a short position of NTG Nordic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ringkjoebing Landbobank and NTG Nordic.
Diversification Opportunities for Ringkjoebing Landbobank and NTG Nordic
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ringkjoebing and NTG is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Ringkjoebing Landbobank AS and NTG Nordic Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NTG Nordic Transport and Ringkjoebing Landbobank 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 Ringkjoebing Landbobank AS are associated (or correlated) with NTG Nordic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NTG Nordic Transport has no effect on the direction of Ringkjoebing Landbobank i.e., Ringkjoebing Landbobank and NTG Nordic go up and down completely randomly.
Pair Corralation between Ringkjoebing Landbobank and NTG Nordic
Assuming the 90 days trading horizon Ringkjoebing Landbobank AS is expected to generate 0.54 times more return on investment than NTG Nordic. However, Ringkjoebing Landbobank AS is 1.85 times less risky than NTG Nordic. It trades about 0.05 of its potential returns per unit of risk. NTG Nordic Transport is currently generating about 0.02 per unit of risk. If you would invest 92,898 in Ringkjoebing Landbobank AS on September 19, 2024 and sell it today you would earn a total of 28,402 from holding Ringkjoebing Landbobank AS or generate 30.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ringkjoebing Landbobank AS vs. NTG Nordic Transport
Performance |
| Timeline |
| Ringkjoebing Landbobank |
| NTG Nordic Transport |
Ringkjoebing Landbobank and NTG Nordic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ringkjoebing Landbobank and NTG Nordic
The main advantage of trading using opposite Ringkjoebing Landbobank and NTG Nordic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ringkjoebing Landbobank position performs unexpectedly, NTG Nordic 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 NTG Nordic will offset losses from the drop in NTG Nordic's long position.| Ringkjoebing Landbobank vs. FLSmidth Co | Ringkjoebing Landbobank vs. Danske Bank AS | Ringkjoebing Landbobank vs. ISS AS | Ringkjoebing Landbobank vs. DSV Panalpina AS |
| NTG Nordic vs. cBrain AS | NTG Nordic vs. Netcompany Group AS | NTG Nordic vs. ChemoMetec AS | NTG Nordic vs. NKT 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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