Correlation Between RTX AS and Nnit AS

Can any of the company-specific risk be diversified away by investing in both RTX AS and Nnit AS 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 RTX AS and Nnit AS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between RTX AS and Nnit AS, you can compare the effects of market volatilities on RTX AS and Nnit AS 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 RTX AS with a short position of Nnit AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of RTX AS and Nnit AS.

Diversification Opportunities for RTX AS and Nnit AS

0.72

Correlation Coefficient

RTX AS  Nnit AS

Poor diversification

The 3 months correlation between RTX and Nnit is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding RTX AS and Nnit AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nnit AS and RTX AS 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 RTX AS are associated (or correlated) with Nnit AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nnit AS has no effect on the direction of RTX AS i.e., RTX AS and Nnit AS go up and down completely randomly.

Pair Corralation between RTX AS and Nnit AS

Assuming the 90 days trading horizon RTX AS is expected to under-perform the Nnit AS. In addition to that, RTX AS is 1.04 times more volatile than Nnit AS. It trades about -0.05 of its total potential returns per unit of risk. Nnit AS is currently generating about 0.04 per unit of volatility. If you would invest  6,760  in Nnit AS on October 22, 2024 and sell it today you would earn a total of  2,550  from holding Nnit AS or generate 37.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.8%
Values	Daily Returns

RTX AS  vs.  Nnit AS

RTX AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days RTX AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Nnit AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nnit AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with RTX AS and Nnit AS

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

The idea behind RTX AS and Nnit AS 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.