Correlation Between FUTURE GAMING and National Retail
Can any of the company-specific risk be diversified away by investing in both FUTURE GAMING 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 FUTURE GAMING and National Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FUTURE GAMING GRP and National Retail Properties, you can compare the effects of market volatilities on FUTURE GAMING 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 FUTURE GAMING with a short position of National Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of FUTURE GAMING and National Retail.
Diversification Opportunities for FUTURE GAMING and National Retail
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FUTURE and National is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding FUTURE GAMING GRP 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 FUTURE GAMING 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 FUTURE GAMING GRP 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 FUTURE GAMING i.e., FUTURE GAMING and National Retail go up and down completely randomly.
Pair Corralation between FUTURE GAMING and National Retail
Assuming the 90 days trading horizon FUTURE GAMING GRP is expected to generate 4.45 times more return on investment than National Retail. However, FUTURE GAMING is 4.45 times more volatile than National Retail Properties. It trades about 0.03 of its potential returns per unit of risk. National Retail Properties is currently generating about 0.02 per unit of risk. If you would invest 45.00 in FUTURE GAMING GRP on December 4, 2024 and sell it today you would lose (2.00) from holding FUTURE GAMING GRP or give up 4.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FUTURE GAMING GRP vs. National Retail Properties
Performance |
| Timeline |
| FUTURE GAMING GRP |
| National Retail Prop |
FUTURE GAMING and National Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FUTURE GAMING and National Retail
The main advantage of trading using opposite FUTURE GAMING and National Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FUTURE GAMING 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.| FUTURE GAMING vs. Mitsubishi Materials | FUTURE GAMING vs. GRIFFIN MINING LTD | FUTURE GAMING vs. Eskay Mining Corp | FUTURE GAMING vs. THRACE PLASTICS |
| National Retail vs. PennantPark Investment | National Retail vs. Japan Asia Investment | National Retail vs. Yunnan Water Investment | National Retail vs. PennyMac Mortgage Investment |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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