Correlation Between AnterogenCoLtd and National Plastic
Can any of the company-specific risk be diversified away by investing in both AnterogenCoLtd and National Plastic 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 AnterogenCoLtd and National Plastic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AnterogenCoLtd and National Plastic Co, you can compare the effects of market volatilities on AnterogenCoLtd and National Plastic 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 AnterogenCoLtd with a short position of National Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of AnterogenCoLtd and National Plastic.
Diversification Opportunities for AnterogenCoLtd and National Plastic
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AnterogenCoLtd and National is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding AnterogenCoLtd and National Plastic Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Plastic and AnterogenCoLtd 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 AnterogenCoLtd are associated (or correlated) with National Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Plastic has no effect on the direction of AnterogenCoLtd i.e., AnterogenCoLtd and National Plastic go up and down completely randomly.
Pair Corralation between AnterogenCoLtd and National Plastic
Assuming the 90 days trading horizon AnterogenCoLtd is expected to generate 2.49 times more return on investment than National Plastic. However, AnterogenCoLtd is 2.49 times more volatile than National Plastic Co. It trades about 0.04 of its potential returns per unit of risk. National Plastic Co is currently generating about -0.04 per unit of risk. If you would invest 1,385,000 in AnterogenCoLtd on September 4, 2024 and sell it today you would earn a total of 245,000 from holding AnterogenCoLtd or generate 17.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AnterogenCoLtd vs. National Plastic Co
Performance |
| Timeline |
| AnterogenCoLtd |
| National Plastic |
AnterogenCoLtd and National Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AnterogenCoLtd and National Plastic
The main advantage of trading using opposite AnterogenCoLtd and National Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AnterogenCoLtd position performs unexpectedly, National Plastic 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 National Plastic will offset losses from the drop in National Plastic's long position.The idea behind AnterogenCoLtd and National Plastic Co 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.| National Plastic vs. LG Uplus | National Plastic vs. ASTORY CoLtd | National Plastic vs. Industrial Bank | National Plastic vs. AnterogenCoLtd |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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