Correlation Between SCOTT TECHNOLOGY and NTG Nordic
Can any of the company-specific risk be diversified away by investing in both SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY and NTG Nordic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCOTT TECHNOLOGY and NTG Nordic Transport, you can compare the effects of market volatilities on SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY with a short position of NTG Nordic. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCOTT TECHNOLOGY and NTG Nordic.
Diversification Opportunities for SCOTT TECHNOLOGY and NTG Nordic
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SCOTT and NTG is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY i.e., SCOTT TECHNOLOGY and NTG Nordic go up and down completely randomly.
Pair Corralation between SCOTT TECHNOLOGY and NTG Nordic
Assuming the 90 days trading horizon SCOTT TECHNOLOGY is expected to generate 1.99 times more return on investment than NTG Nordic. However, SCOTT TECHNOLOGY is 1.99 times more volatile than NTG Nordic Transport. It trades about 0.19 of its potential returns per unit of risk. NTG Nordic Transport is currently generating about 0.11 per unit of risk. If you would invest 122.00 in SCOTT TECHNOLOGY on September 1, 2024 and sell it today you would earn a total of 14.00 from holding SCOTT TECHNOLOGY or generate 11.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SCOTT TECHNOLOGY vs. NTG Nordic Transport
Performance |
| Timeline |
| SCOTT TECHNOLOGY |
| NTG Nordic Transport |
SCOTT TECHNOLOGY and NTG Nordic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCOTT TECHNOLOGY and NTG Nordic
The main advantage of trading using opposite SCOTT TECHNOLOGY and NTG Nordic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCOTT TECHNOLOGY 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.| SCOTT TECHNOLOGY vs. SIVERS SEMICONDUCTORS AB | SCOTT TECHNOLOGY vs. Darden Restaurants | SCOTT TECHNOLOGY vs. Reliance Steel Aluminum | SCOTT TECHNOLOGY vs. Q2M Managementberatung AG |
| NTG Nordic vs. Superior Plus Corp | NTG Nordic vs. NMI Holdings | NTG Nordic vs. Origin Agritech | NTG Nordic vs. SIVERS SEMICONDUCTORS AB |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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