Correlation Between Bet-at-home and National Retail
Can any of the company-specific risk be diversified away by investing in both Bet-at-home 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 Bet-at-home and National Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between bet at home AG and National Retail Properties, you can compare the effects of market volatilities on Bet-at-home 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 Bet-at-home with a short position of National Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bet-at-home and National Retail.
Diversification Opportunities for Bet-at-home and National Retail
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bet-at-home and National is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding bet at home AG 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 Bet-at-home 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 bet at home AG 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 Bet-at-home i.e., Bet-at-home and National Retail go up and down completely randomly.
Pair Corralation between Bet-at-home and National Retail
Assuming the 90 days trading horizon bet at home AG is expected to under-perform the National Retail. In addition to that, Bet-at-home is 2.42 times more volatile than National Retail Properties. It trades about -0.04 of its total potential returns per unit of risk. National Retail Properties is currently generating about 0.02 per unit of volatility. If you would invest 3,930 in National Retail Properties on September 1, 2024 and sell it today you would earn a total of 268.00 from holding National Retail Properties or generate 6.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
bet at home AG vs. National Retail Properties
Performance |
| Timeline |
| bet at home |
| National Retail Prop |
Bet-at-home and National Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bet-at-home and National Retail
The main advantage of trading using opposite Bet-at-home and National Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bet-at-home 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.| Bet-at-home vs. SIVERS SEMICONDUCTORS AB | Bet-at-home vs. Darden Restaurants | Bet-at-home vs. Reliance Steel Aluminum | Bet-at-home vs. Q2M Managementberatung AG |
| National Retail vs. Apple Inc | National Retail vs. Apple Inc | National Retail vs. Apple Inc | National Retail vs. Apple Inc |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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