Correlation Between NTG Nordic and BankIn Bredygt

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

Diversification Opportunities for NTG Nordic and BankIn Bredygt

-0.75

Correlation Coefficient

NTG Nordic  BankIn Bredygt

Pay attention - limited upside

The 3 months correlation between NTG and BankIn is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding NTG Nordic Transport and BankIn Bredygt Klimaakt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BankIn Bredygt Klimaakt 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 BankIn Bredygt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BankIn Bredygt Klimaakt has no effect on the direction of NTG Nordic i.e., NTG Nordic and BankIn Bredygt go up and down completely randomly.

Pair Corralation between NTG Nordic and BankIn Bredygt

Assuming the 90 days trading horizon NTG Nordic Transport is expected to generate 1.77 times more return on investment than BankIn Bredygt. However, NTG Nordic is 1.77 times more volatile than BankIn Bredygt Klimaakt. It trades about 0.05 of its potential returns per unit of risk. BankIn Bredygt Klimaakt is currently generating about -0.22 per unit of risk. If you would invest  25,650  in NTG Nordic Transport on December 30, 2024 and sell it today you would earn a total of  1,350  from holding NTG Nordic Transport or generate 5.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	60.94%
Values	Daily Returns

NTG Nordic Transport  vs.  BankIn Bredygt Klimaakt

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 4 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, NTG Nordic is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

BankIn Bredygt Klimaakt

Risk-Adjusted Performance

Very Weak

Over the last 90 days BankIn Bredygt Klimaakt has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's forward indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with NTG Nordic and BankIn Bredygt

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

The idea behind NTG Nordic Transport and BankIn Bredygt Klimaakt 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.