Correlation Between National Retail and Lion One
Can any of the company-specific risk be diversified away by investing in both National Retail and Lion One 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 Lion One 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 Lion One Metals, you can compare the effects of market volatilities on National Retail and Lion One 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 Lion One. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Retail and Lion One.
Diversification Opportunities for National Retail and Lion One
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between National and Lion is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding National Retail Properties and Lion One Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion One Metals 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 Lion One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion One Metals has no effect on the direction of National Retail i.e., National Retail and Lion One go up and down completely randomly.
Pair Corralation between National Retail and Lion One
Assuming the 90 days trading horizon National Retail Properties is expected to generate 0.28 times more return on investment than Lion One. However, National Retail Properties is 3.6 times less risky than Lion One. It trades about 0.04 of its potential returns per unit of risk. Lion One Metals is currently generating about -0.02 per unit of risk. If you would invest 3,637 in National Retail Properties on August 31, 2024 and sell it today you would earn a total of 561.00 from holding National Retail Properties or generate 15.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
National Retail Properties vs. Lion One Metals
Performance |
| Timeline |
| National Retail Prop |
| Lion One Metals |
National Retail and Lion One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Retail and Lion One
The main advantage of trading using opposite National Retail and Lion One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Retail position performs unexpectedly, Lion One 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 Lion One will offset losses from the drop in Lion One's long position.| National Retail vs. Apple Inc | National Retail vs. Apple Inc | National Retail vs. Apple Inc | National Retail vs. Apple Inc |
| Lion One vs. ZIJIN MINH UNSPADR20 | Lion One vs. Superior Plus Corp | Lion One vs. NMI Holdings | Lion One vs. Origin Agritech |
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 Stocks Directory module to find actively traded stocks across global markets.
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