Correlation Between NTG Nordic and BRUNELLO C

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

Diversification Opportunities for NTG Nordic and BRUNELLO C

-0.83

Correlation Coefficient

NTG Nordic  BRUNELLO C

Pay attention - limited upside

The 3 months correlation between NTG and BRUNELLO is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding NTG Nordic Transport and BRUNELLO C SPA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRUNELLO C SPA 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 BRUNELLO C. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRUNELLO C SPA has no effect on the direction of NTG Nordic i.e., NTG Nordic and BRUNELLO C go up and down completely randomly.

Pair Corralation between NTG Nordic and BRUNELLO C

Assuming the 90 days trading horizon NTG Nordic Transport is expected to under-perform the BRUNELLO C. But the stock apears to be less risky and, when comparing its historical volatility, NTG Nordic Transport is 1.69 times less risky than BRUNELLO C. The stock trades about -0.37 of its potential returns per unit of risk. The BRUNELLO C SPA is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest  9,655  in BRUNELLO C SPA on October 8, 2024 and sell it today you would earn a total of  895.00  from holding BRUNELLO C SPA or generate 9.27% return on investment over 90 days.

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

NTG Nordic Transport  vs.  BRUNELLO C SPA

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.

BRUNELLO C SPA

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BRUNELLO C SPA are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, BRUNELLO C may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with NTG Nordic and BRUNELLO C

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

The idea behind NTG Nordic Transport and BRUNELLO C SPA 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.

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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.