Correlation Between National Retail and Neinor Homes
Can any of the company-specific risk be diversified away by investing in both National Retail and Neinor Homes 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 National Retail and Neinor Homes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Retail Properties and Neinor Homes SA, you can compare the effects of market volatilities on National Retail and Neinor Homes 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 National Retail with a short position of Neinor Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Retail and Neinor Homes.
Diversification Opportunities for National Retail and Neinor Homes
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between National and Neinor is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding National Retail Properties and Neinor Homes SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neinor Homes SA and National Retail 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 National Retail Properties are associated (or correlated) with Neinor Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neinor Homes SA has no effect on the direction of National Retail i.e., National Retail and Neinor Homes go up and down completely randomly.
Pair Corralation between National Retail and Neinor Homes
Assuming the 90 days trading horizon National Retail is expected to generate 7.19 times less return on investment than Neinor Homes. But when comparing it to its historical volatility, National Retail Properties is 1.48 times less risky than Neinor Homes. It trades about 0.02 of its potential returns per unit of risk. Neinor Homes SA is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 736.00 in Neinor Homes SA on September 3, 2024 and sell it today you would earn a total of 768.00 from holding Neinor Homes SA or generate 104.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Retail Properties vs. Neinor Homes SA
Performance |
| Timeline |
| National Retail Prop |
| Neinor Homes SA |
National Retail and Neinor Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Retail and Neinor Homes
The main advantage of trading using opposite National Retail and Neinor Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Retail position performs unexpectedly, Neinor Homes 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 Neinor Homes will offset losses from the drop in Neinor Homes' long position.| National Retail vs. QBE Insurance Group | National Retail vs. United Natural Foods | National Retail vs. TYSON FOODS A | National Retail vs. Luckin Coffee |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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