Correlation Between NTG Nordic and Siamgas

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

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

Diversification Opportunities for NTG Nordic and Siamgas

-0.23

Correlation Coefficient

NTG Nordic  Siamgas

Very good diversification

The 3 months correlation between NTG and Siamgas is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding NTG Nordic Transport and Siamgas And Petrochemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siamgas And Petroche and NTG Nordic 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 NTG Nordic Transport are associated (or correlated) with Siamgas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siamgas And Petroche has no effect on the direction of NTG Nordic i.e., NTG Nordic and Siamgas go up and down completely randomly.

Pair Corralation between NTG Nordic and Siamgas

Assuming the 90 days trading horizon NTG Nordic is expected to generate 1.51 times less return on investment than Siamgas. But when comparing it to its historical volatility, NTG Nordic Transport is 4.24 times less risky than Siamgas. It trades about 0.06 of its potential returns per unit of risk. Siamgas And Petrochemicals is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  17.00  in Siamgas And Petrochemicals on December 21, 2024 and sell it today you would lose (1.00) from holding Siamgas And Petrochemicals or give up 5.88% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

NTG Nordic Transport  vs.  Siamgas And Petrochemicals

NTG Nordic Transport

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in NTG Nordic Transport are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, NTG Nordic may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Siamgas And Petroche

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Siamgas And Petrochemicals are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Siamgas may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with NTG Nordic and Siamgas

The main advantage of trading using opposite NTG Nordic and Siamgas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NTG Nordic position performs unexpectedly, Siamgas 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 Siamgas will offset losses from the drop in Siamgas' long position.

The idea behind NTG Nordic Transport and Siamgas And Petrochemicals 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.