Correlation Between Scottish Mortgage and National Retail
Can any of the company-specific risk be diversified away by investing in both Scottish Mortgage 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 Scottish Mortgage and National Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scottish Mortgage Investment and National Retail Properties, you can compare the effects of market volatilities on Scottish Mortgage 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 Scottish Mortgage with a short position of National Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scottish Mortgage and National Retail.
Diversification Opportunities for Scottish Mortgage and National Retail
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Scottish and National is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Scottish Mortgage Investment 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 Scottish Mortgage 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 Scottish Mortgage Investment 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 Scottish Mortgage i.e., Scottish Mortgage and National Retail go up and down completely randomly.
Pair Corralation between Scottish Mortgage and National Retail
Assuming the 90 days trading horizon Scottish Mortgage Investment is expected to generate 0.77 times more return on investment than National Retail. However, Scottish Mortgage Investment is 1.3 times less risky than National Retail. It trades about 0.11 of its potential returns per unit of risk. National Retail Properties is currently generating about -0.36 per unit of risk. If you would invest 1,177 in Scottish Mortgage Investment on October 11, 2024 and sell it today you would earn a total of 20.00 from holding Scottish Mortgage Investment or generate 1.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scottish Mortgage Investment vs. National Retail Properties
Performance |
| Timeline |
| Scottish Mortgage |
| National Retail Prop |
Scottish Mortgage and National Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scottish Mortgage and National Retail
The main advantage of trading using opposite Scottish Mortgage and National Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scottish Mortgage 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.| Scottish Mortgage vs. Cogent Communications Holdings | Scottish Mortgage vs. CRISPR Therapeutics AG | Scottish Mortgage vs. INTERCONT HOTELS | Scottish Mortgage vs. Rocket Internet SE |
| National Retail vs. ECHO INVESTMENT ZY | National Retail vs. Cardinal Health | National Retail vs. Phibro Animal Health | National Retail vs. US Physical Therapy |
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 Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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