Correlation Between National Retail and Globe Trade
Can any of the company-specific risk be diversified away by investing in both National Retail and Globe Trade 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 Globe Trade 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 Globe Trade Centre, you can compare the effects of market volatilities on National Retail and Globe Trade 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 Globe Trade. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Retail and Globe Trade.
Diversification Opportunities for National Retail and Globe Trade
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between National and Globe is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding National Retail Properties and Globe Trade Centre in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globe Trade Centre 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 Globe Trade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globe Trade Centre has no effect on the direction of National Retail i.e., National Retail and Globe Trade go up and down completely randomly.
Pair Corralation between National Retail and Globe Trade
If you would invest 4,173 in National Retail Properties on August 31, 2024 and sell it today you would earn a total of 31.00 from holding National Retail Properties or generate 0.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Retail Properties vs. Globe Trade Centre
Performance |
| Timeline |
| National Retail Prop |
| Globe Trade Centre |
National Retail and Globe Trade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Retail and Globe Trade
The main advantage of trading using opposite National Retail and Globe Trade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Retail position performs unexpectedly, Globe Trade 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 Globe Trade will offset losses from the drop in Globe Trade's long position.| National Retail vs. Apple Inc | National Retail vs. Apple Inc | National Retail vs. Apple Inc | National Retail vs. Apple Inc |
| Globe Trade vs. SIVERS SEMICONDUCTORS AB | Globe Trade vs. Darden Restaurants | Globe Trade vs. Reliance Steel Aluminum | Globe Trade vs. Q2M Managementberatung 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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