Correlation Between National Retail and Orsted AS
Can any of the company-specific risk be diversified away by investing in both National Retail and Orsted AS 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 Orsted AS 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 Orsted AS, you can compare the effects of market volatilities on National Retail and Orsted AS 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 Orsted AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Retail and Orsted AS.
Diversification Opportunities for National Retail and Orsted AS
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between National and Orsted is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding National Retail Properties and Orsted AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orsted AS 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 Orsted AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orsted AS has no effect on the direction of National Retail i.e., National Retail and Orsted AS go up and down completely randomly.
Pair Corralation between National Retail and Orsted AS
Assuming the 90 days trading horizon National Retail Properties is expected to generate 0.34 times more return on investment than Orsted AS. However, National Retail Properties is 2.93 times less risky than Orsted AS. It trades about 0.0 of its potential returns per unit of risk. Orsted AS is currently generating about -0.28 per unit of risk. If you would invest 3,891 in National Retail Properties on October 24, 2024 and sell it today you would lose (6.00) from holding National Retail Properties or give up 0.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Retail Properties vs. Orsted AS
Performance |
| Timeline |
| National Retail Prop |
| Orsted AS |
National Retail and Orsted AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Retail and Orsted AS
The main advantage of trading using opposite National Retail and Orsted AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Retail position performs unexpectedly, Orsted AS 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 Orsted AS will offset losses from the drop in Orsted AS's long position.| National Retail vs. NH HOTEL GROUP | National Retail vs. Choice Hotels International | National Retail vs. BURLINGTON STORES | National Retail vs. Xenia Hotels Resorts |
| Orsted AS vs. Ares Management Corp | Orsted AS vs. Cleanaway Waste Management | Orsted AS vs. Kingdee International Software | Orsted AS vs. USU Software AG |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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