Correlation Between ROCKWOOL International and NTG Nordic
Can any of the company-specific risk be diversified away by investing in both ROCKWOOL International 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 ROCKWOOL International and NTG Nordic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ROCKWOOL International AS and NTG Nordic Transport, you can compare the effects of market volatilities on ROCKWOOL International 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 ROCKWOOL International with a short position of NTG Nordic. Check out your portfolio center. Please also check ongoing floating volatility patterns of ROCKWOOL International and NTG Nordic.
Diversification Opportunities for ROCKWOOL International and NTG Nordic
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ROCKWOOL and NTG is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding ROCKWOOL International 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 ROCKWOOL International 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 ROCKWOOL International 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 ROCKWOOL International i.e., ROCKWOOL International and NTG Nordic go up and down completely randomly.
Pair Corralation between ROCKWOOL International and NTG Nordic
Assuming the 90 days trading horizon ROCKWOOL International AS is expected to generate 0.76 times more return on investment than NTG Nordic. However, ROCKWOOL International AS is 1.32 times less risky than NTG Nordic. It trades about 0.08 of its potential returns per unit of risk. NTG Nordic Transport is currently generating about -0.01 per unit of risk. If you would invest 168,086 in ROCKWOOL International AS on September 3, 2024 and sell it today you would earn a total of 89,714 from holding ROCKWOOL International AS or generate 53.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ROCKWOOL International AS vs. NTG Nordic Transport
Performance |
| Timeline |
| ROCKWOOL International |
| NTG Nordic Transport |
ROCKWOOL International and NTG Nordic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ROCKWOOL International and NTG Nordic
The main advantage of trading using opposite ROCKWOOL International and NTG Nordic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ROCKWOOL International 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.| ROCKWOOL International vs. FLSmidth Co | ROCKWOOL International vs. GN Store Nord | ROCKWOOL International vs. Ambu AS | ROCKWOOL International 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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