Correlation Between Carnegie Wealth and NTG Nordic

Can any of the company-specific risk be diversified away by investing in both Carnegie Wealth 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 Carnegie Wealth and NTG Nordic into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Carnegie Wealth Management and NTG Nordic Transport, you can compare the effects of market volatilities on Carnegie Wealth 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 Carnegie Wealth with a short position of NTG Nordic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carnegie Wealth and NTG Nordic.

Diversification Opportunities for Carnegie Wealth and NTG Nordic

0.06

Correlation Coefficient

Carnegie Wealth  NTG Nordic

Significant diversification

The 3 months correlation between Carnegie and NTG is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Carnegie Wealth Management 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 Carnegie Wealth 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 Carnegie Wealth Management 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 Carnegie Wealth i.e., Carnegie Wealth and NTG Nordic go up and down completely randomly.

Pair Corralation between Carnegie Wealth and NTG Nordic

Assuming the 90 days trading horizon Carnegie Wealth Management is not expected to generate positive returns. However, Carnegie Wealth Management is 2.19 times less risky than NTG Nordic. It waists most of its returns potential to compensate for thr risk taken. NTG Nordic is generating about 0.08 per unit of risk. If you would invest  26,100  in NTG Nordic Transport on September 4, 2024 and sell it today you would earn a total of  2,700  from holding NTG Nordic Transport or generate 10.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Carnegie Wealth Management  vs.  NTG Nordic Transport

Carnegie Wealth Mana

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Carnegie Wealth Management has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward indicators, Carnegie Wealth is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

NTG Nordic Transport

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in NTG Nordic Transport are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, NTG Nordic may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Carnegie Wealth and NTG Nordic

The main advantage of trading using opposite Carnegie Wealth and NTG Nordic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carnegie Wealth 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.

The idea behind Carnegie Wealth Management and NTG Nordic Transport pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.