Correlation Between NTG Nordic and IA Invest

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

Diversification Opportunities for NTG Nordic and IA Invest

-0.39

Correlation Coefficient

NTG Nordic  IA Invest

Very good diversification

The 3 months correlation between NTG and IAIACVF is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding NTG Nordic Transport and IA Invest Advice in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IA Invest Advice 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 IA Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IA Invest Advice has no effect on the direction of NTG Nordic i.e., NTG Nordic and IA Invest go up and down completely randomly.

Pair Corralation between NTG Nordic and IA Invest

Assuming the 90 days trading horizon NTG Nordic Transport is expected to under-perform the IA Invest. In addition to that, NTG Nordic is 1.57 times more volatile than IA Invest Advice. It trades about -0.47 of its total potential returns per unit of risk. IA Invest Advice is currently generating about -0.2 per unit of volatility. If you would invest  14,095  in IA Invest Advice on September 27, 2024 and sell it today you would lose (370.00) from holding IA Invest Advice or give up 2.63% 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.  IA Invest Advice

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.

IA Invest Advice

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in IA Invest Advice are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, IA Invest is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with NTG Nordic and IA Invest

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

The idea behind NTG Nordic Transport and IA Invest Advice 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.