Correlation Between Skjern Bank and NTG Nordic
Can any of the company-specific risk be diversified away by investing in both Skjern Bank 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 Skjern Bank and NTG Nordic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Skjern Bank AS and NTG Nordic Transport, you can compare the effects of market volatilities on Skjern Bank 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 Skjern Bank with a short position of NTG Nordic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skjern Bank and NTG Nordic.
Diversification Opportunities for Skjern Bank and NTG Nordic
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Skjern and NTG is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Skjern Bank 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 Skjern Bank 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 Skjern Bank 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 Skjern Bank i.e., Skjern Bank and NTG Nordic go up and down completely randomly.
Pair Corralation between Skjern Bank and NTG Nordic
Assuming the 90 days trading horizon Skjern Bank AS is expected to under-perform the NTG Nordic. But the stock apears to be less risky and, when comparing its historical volatility, Skjern Bank AS is 1.25 times less risky than NTG Nordic. The stock trades about -0.24 of its potential returns per unit of risk. The NTG Nordic Transport is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 29,000 in NTG Nordic Transport on September 5, 2024 and sell it today you would lose (100.00) from holding NTG Nordic Transport or give up 0.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Skjern Bank AS vs. NTG Nordic Transport
Performance |
| Timeline |
| Skjern Bank AS |
| NTG Nordic Transport |
Skjern Bank and NTG Nordic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skjern Bank and NTG Nordic
The main advantage of trading using opposite Skjern Bank and NTG Nordic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skjern Bank 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.| Skjern Bank vs. NTG Nordic Transport | Skjern Bank vs. Embla Medical hf | Skjern Bank vs. PARKEN Sport Entertainment | Skjern Bank vs. Prime Office 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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