Correlation Between National Retail and ARDAGH METAL
Can any of the company-specific risk be diversified away by investing in both National Retail and ARDAGH METAL 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 ARDAGH METAL 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 ARDAGH METAL PACDL 0001, you can compare the effects of market volatilities on National Retail and ARDAGH METAL 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 ARDAGH METAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Retail and ARDAGH METAL.
Diversification Opportunities for National Retail and ARDAGH METAL
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between National and ARDAGH is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding National Retail Properties and ARDAGH METAL PACDL 0001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARDAGH METAL PACDL 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 ARDAGH METAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARDAGH METAL PACDL has no effect on the direction of National Retail i.e., National Retail and ARDAGH METAL go up and down completely randomly.
Pair Corralation between National Retail and ARDAGH METAL
Assuming the 90 days trading horizon National Retail Properties is expected to generate 0.21 times more return on investment than ARDAGH METAL. However, National Retail Properties is 4.82 times less risky than ARDAGH METAL. It trades about -0.55 of its potential returns per unit of risk. ARDAGH METAL PACDL 0001 is currently generating about -0.21 per unit of risk. If you would invest 4,178 in National Retail Properties on September 24, 2024 and sell it today you would lose (356.00) from holding National Retail Properties or give up 8.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Retail Properties vs. ARDAGH METAL PACDL 0001
Performance |
| Timeline |
| National Retail Prop |
| ARDAGH METAL PACDL |
National Retail and ARDAGH METAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Retail and ARDAGH METAL
The main advantage of trading using opposite National Retail and ARDAGH METAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Retail position performs unexpectedly, ARDAGH METAL 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 ARDAGH METAL will offset losses from the drop in ARDAGH METAL's long position.| National Retail vs. Apple Inc | National Retail vs. Apple Inc | National Retail vs. Apple Inc | National Retail vs. Apple Inc |
| ARDAGH METAL vs. Electronic Arts | ARDAGH METAL vs. BJs Wholesale Club | ARDAGH METAL vs. National Retail Properties | ARDAGH METAL vs. Meiko Electronics Co |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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