Correlation Between NAU IB and Alton Sports
Can any of the company-specific risk be diversified away by investing in both NAU IB and Alton Sports 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 NAU IB and Alton Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NAU IB Capital and Alton Sports CoLtd, you can compare the effects of market volatilities on NAU IB and Alton Sports 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 NAU IB with a short position of Alton Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of NAU IB and Alton Sports.
Diversification Opportunities for NAU IB and Alton Sports
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between NAU and Alton is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding NAU IB Capital and Alton Sports CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alton Sports CoLtd and NAU IB 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 NAU IB Capital are associated (or correlated) with Alton Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alton Sports CoLtd has no effect on the direction of NAU IB i.e., NAU IB and Alton Sports go up and down completely randomly.
Pair Corralation between NAU IB and Alton Sports
Assuming the 90 days trading horizon NAU IB Capital is expected to generate 2.04 times more return on investment than Alton Sports. However, NAU IB is 2.04 times more volatile than Alton Sports CoLtd. It trades about 0.03 of its potential returns per unit of risk. Alton Sports CoLtd is currently generating about -0.12 per unit of risk. If you would invest 104,957 in NAU IB Capital on December 2, 2024 and sell it today you would earn a total of 14,843 from holding NAU IB Capital or generate 14.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.58% |
| Values | Daily Returns |
NAU IB Capital vs. Alton Sports CoLtd
Performance |
| Timeline |
| NAU IB Capital |
| Alton Sports CoLtd |
NAU IB and Alton Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NAU IB and Alton Sports
The main advantage of trading using opposite NAU IB and Alton Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NAU IB position performs unexpectedly, Alton Sports 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 Alton Sports will offset losses from the drop in Alton Sports' long position.| NAU IB vs. Iljin Display | NAU IB vs. Ssangyong Information Communication | NAU IB vs. Daishin Information Communications | NAU IB vs. Atinum Investment Co |
| Alton Sports vs. Hyundai Industrial Co | Alton Sports vs. Jinro Distillers Co | Alton Sports vs. Handok Clean Tech | Alton Sports vs. Industrial Bank |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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