Correlation Between National Retail and Haier Smart
Can any of the company-specific risk be diversified away by investing in both National Retail and Haier Smart 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 Haier Smart 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 Haier Smart Home, you can compare the effects of market volatilities on National Retail and Haier Smart 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 Haier Smart. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Retail and Haier Smart.
Diversification Opportunities for National Retail and Haier Smart
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between National and Haier is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding National Retail Properties and Haier Smart Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haier Smart Home 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 Haier Smart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haier Smart Home has no effect on the direction of National Retail i.e., National Retail and Haier Smart go up and down completely randomly.
Pair Corralation between National Retail and Haier Smart
Assuming the 90 days trading horizon National Retail Properties is expected to generate 1.44 times more return on investment than Haier Smart. However, National Retail is 1.44 times more volatile than Haier Smart Home. It trades about 0.13 of its potential returns per unit of risk. Haier Smart Home is currently generating about 0.12 per unit of risk. If you would invest 3,983 in National Retail Properties on September 3, 2024 and sell it today you would earn a total of 215.00 from holding National Retail Properties or generate 5.4% 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. Haier Smart Home
Performance |
| Timeline |
| National Retail Prop |
| Haier Smart Home |
National Retail and Haier Smart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Retail and Haier Smart
The main advantage of trading using opposite National Retail and Haier Smart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Retail position performs unexpectedly, Haier Smart 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 Haier Smart will offset losses from the drop in Haier Smart's 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 |
| Haier Smart vs. Sixt Leasing SE | Haier Smart vs. ALGOMA STEEL GROUP | Haier Smart vs. Tianjin Capital Environmental | Haier Smart vs. Perma Fix Environmental Services |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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