Correlation Between Corporate Travel and National Retail
Can any of the company-specific risk be diversified away by investing in both Corporate Travel and National Retail 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 Corporate Travel and National Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Corporate Travel Management and National Retail Properties, you can compare the effects of market volatilities on Corporate Travel and National Retail 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 Corporate Travel with a short position of National Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corporate Travel and National Retail.
Diversification Opportunities for Corporate Travel and National Retail
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Corporate and National is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Corporate Travel Management and National Retail Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Retail Prop and Corporate Travel 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 Corporate Travel Management are associated (or correlated) with National Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Retail Prop has no effect on the direction of Corporate Travel i.e., Corporate Travel and National Retail go up and down completely randomly.
Pair Corralation between Corporate Travel and National Retail
Assuming the 90 days trading horizon Corporate Travel is expected to generate 1.44 times less return on investment than National Retail. In addition to that, Corporate Travel is 2.19 times more volatile than National Retail Properties. It trades about 0.02 of its total potential returns per unit of risk. National Retail Properties is currently generating about 0.07 per unit of volatility. If you would invest 3,700 in National Retail Properties on August 25, 2024 and sell it today you would earn a total of 459.00 from holding National Retail Properties or generate 12.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Corporate Travel Management vs. National Retail Properties
Performance |
| Timeline |
| Corporate Travel Man |
| National Retail Prop |
Corporate Travel and National Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Corporate Travel and National Retail
The main advantage of trading using opposite Corporate Travel and National Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corporate Travel position performs unexpectedly, National Retail 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 Retail will offset losses from the drop in National Retail's long position.| Corporate Travel vs. Apple Inc | Corporate Travel vs. Apple Inc | Corporate Travel vs. Apple Inc | Corporate Travel vs. Apple Inc |
| National Retail vs. Q2M Managementberatung AG | National Retail vs. JJ SNACK FOODS | National Retail vs. Corporate Travel Management | National Retail vs. PT Indofood Sukses |
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 Stocks Directory module to find actively traded stocks across global markets.
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