Correlation Between NTG Nordic and Handelsinvest Danske

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

Diversification Opportunities for NTG Nordic and Handelsinvest Danske

-0.61

Correlation Coefficient

NTG Nordic  Handelsinvest Danske

Excellent diversification

The 3 months correlation between NTG and Handelsinvest is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding NTG Nordic Transport and Handelsinvest Danske Obligatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Handelsinvest Danske 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 Handelsinvest Danske. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Handelsinvest Danske has no effect on the direction of NTG Nordic i.e., NTG Nordic and Handelsinvest Danske go up and down completely randomly.

Pair Corralation between NTG Nordic and Handelsinvest Danske

Assuming the 90 days trading horizon NTG Nordic Transport is expected to generate 13.31 times more return on investment than Handelsinvest Danske. However, NTG Nordic is 13.31 times more volatile than Handelsinvest Danske Obligationer. It trades about 0.01 of its potential returns per unit of risk. Handelsinvest Danske Obligationer is currently generating about 0.1 per unit of risk. If you would invest  25,100  in NTG Nordic Transport on October 4, 2024 and sell it today you would earn a total of  550.00  from holding NTG Nordic Transport or generate 2.19% return on investment over 90 days.

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

NTG Nordic Transport  vs.  Handelsinvest Danske Obligatio

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. In spite of latest weak performance, the Stock's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Handelsinvest Danske

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Handelsinvest Danske Obligationer are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong forward-looking signals, Handelsinvest Danske is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with NTG Nordic and Handelsinvest Danske

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

The idea behind NTG Nordic Transport and Handelsinvest Danske Obligationer 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..