Correlation Between NTG Nordic and Carnegie Wealth

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

Diversification Opportunities for NTG Nordic and Carnegie Wealth

0.01

Correlation Coefficient

NTG Nordic  Carnegie Wealth

Significant diversification

The 3 months correlation between NTG and Carnegie is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding NTG Nordic Transport and Carnegie Wealth Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carnegie Wealth Mana 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 Carnegie Wealth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carnegie Wealth Mana has no effect on the direction of NTG Nordic i.e., NTG Nordic and Carnegie Wealth go up and down completely randomly.

Pair Corralation between NTG Nordic and Carnegie Wealth

Assuming the 90 days trading horizon NTG Nordic Transport is expected to generate 2.27 times more return on investment than Carnegie Wealth. However, NTG Nordic is 2.27 times more volatile than Carnegie Wealth Management. It trades about 0.06 of its potential returns per unit of risk. Carnegie Wealth Management is currently generating about -0.06 per unit of risk. If you would invest  26,650  in NTG Nordic Transport on September 3, 2024 and sell it today you would earn a total of  1,850  from holding NTG Nordic Transport or generate 6.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

NTG Nordic Transport  vs.  Carnegie Wealth Management

NTG Nordic Transport

Risk-Adjusted Performance

4 of 100

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 weak technical and fundamental indicators, NTG Nordic may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Carnegie Wealth Mana

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Carnegie Wealth Management has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward indicators, Carnegie Wealth 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 Carnegie Wealth

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

The idea behind NTG Nordic Transport and Carnegie Wealth Management 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.