Correlation Between NGS Group and Betsson AB
Can any of the company-specific risk be diversified away by investing in both NGS Group and Betsson AB 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 NGS Group and Betsson AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NGS Group AB and Betsson AB, you can compare the effects of market volatilities on NGS Group and Betsson AB 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 NGS Group with a short position of Betsson AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of NGS Group and Betsson AB.
Diversification Opportunities for NGS Group and Betsson AB
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NGS and Betsson is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding NGS Group AB and Betsson AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Betsson AB and NGS Group 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 NGS Group AB are associated (or correlated) with Betsson AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Betsson AB has no effect on the direction of NGS Group i.e., NGS Group and Betsson AB go up and down completely randomly.
Pair Corralation between NGS Group and Betsson AB
Assuming the 90 days trading horizon NGS Group is expected to generate 8.1 times less return on investment than Betsson AB. In addition to that, NGS Group is 1.03 times more volatile than Betsson AB. It trades about 0.03 of its total potential returns per unit of risk. Betsson AB is currently generating about 0.24 per unit of volatility. If you would invest 10,870 in Betsson AB on February 7, 2024 and sell it today you would earn a total of 1,650 from holding Betsson AB or generate 15.18% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
NGS Group AB vs. Betsson AB
Performance |
Timeline |
NGS Group AB |
Betsson AB |
NGS Group and Betsson AB Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with NGS Group and Betsson AB
The main advantage of trading using opposite NGS Group and Betsson AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NGS Group position performs unexpectedly, Betsson AB 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 Betsson AB will offset losses from the drop in Betsson AB's long position.NGS Group vs. Betsson AB | NGS Group vs. Bjorn Borg AB | NGS Group vs. Novotek AB | NGS Group vs. CellaVision AB |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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