Correlation Between NTG Nordic and SENKO GROUP

Can any of the company-specific risk be diversified away by investing in both NTG Nordic and SENKO GROUP 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 SENKO GROUP 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 SENKO GROUP HOLDINGS, you can compare the effects of market volatilities on NTG Nordic and SENKO GROUP 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 SENKO GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of NTG Nordic and SENKO GROUP.

Diversification Opportunities for NTG Nordic and SENKO GROUP

-0.42

Correlation Coefficient

NTG Nordic  SENKO GROUP

Very good diversification

The 3 months correlation between NTG and SENKO is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding NTG Nordic Transport and SENKO GROUP HOLDINGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SENKO GROUP HOLDINGS 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 SENKO GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SENKO GROUP HOLDINGS has no effect on the direction of NTG Nordic i.e., NTG Nordic and SENKO GROUP go up and down completely randomly.

Pair Corralation between NTG Nordic and SENKO GROUP

Assuming the 90 days trading horizon NTG Nordic Transport is expected to under-perform the SENKO GROUP. In addition to that, NTG Nordic is 1.62 times more volatile than SENKO GROUP HOLDINGS. It trades about -0.04 of its total potential returns per unit of risk. SENKO GROUP HOLDINGS is currently generating about 0.18 per unit of volatility. If you would invest  645.00  in SENKO GROUP HOLDINGS on October 13, 2024 and sell it today you would earn a total of  240.00  from holding SENKO GROUP HOLDINGS or generate 37.21% return on investment over 90 days.

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

NTG Nordic Transport  vs.  SENKO GROUP HOLDINGS

NTG Nordic Transport

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NTG Nordic Transport has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

SENKO GROUP HOLDINGS

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SENKO GROUP HOLDINGS are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, SENKO GROUP may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with NTG Nordic and SENKO GROUP

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

The idea behind NTG Nordic Transport and SENKO GROUP HOLDINGS 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.