Correlation Between National Retail and SEKISUI CHEMICAL
Can any of the company-specific risk be diversified away by investing in both National Retail and SEKISUI CHEMICAL 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 SEKISUI CHEMICAL 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 SEKISUI CHEMICAL, you can compare the effects of market volatilities on National Retail and SEKISUI CHEMICAL 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 SEKISUI CHEMICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Retail and SEKISUI CHEMICAL.
Diversification Opportunities for National Retail and SEKISUI CHEMICAL
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between National and SEKISUI is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding National Retail Properties and SEKISUI CHEMICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEKISUI CHEMICAL 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 SEKISUI CHEMICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEKISUI CHEMICAL has no effect on the direction of National Retail i.e., National Retail and SEKISUI CHEMICAL go up and down completely randomly.
Pair Corralation between National Retail and SEKISUI CHEMICAL
Assuming the 90 days trading horizon National Retail Properties is expected to generate 0.96 times more return on investment than SEKISUI CHEMICAL. However, National Retail Properties is 1.04 times less risky than SEKISUI CHEMICAL. It trades about 0.04 of its potential returns per unit of risk. SEKISUI CHEMICAL is currently generating about 0.03 per unit of risk. If you would invest 3,646 in National Retail Properties on September 2, 2024 and sell it today you would earn a total of 552.00 from holding National Retail Properties or generate 15.14% 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. SEKISUI CHEMICAL
Performance |
| Timeline |
| National Retail Prop |
| SEKISUI CHEMICAL |
National Retail and SEKISUI CHEMICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Retail and SEKISUI CHEMICAL
The main advantage of trading using opposite National Retail and SEKISUI CHEMICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Retail position performs unexpectedly, SEKISUI CHEMICAL 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 SEKISUI CHEMICAL will offset losses from the drop in SEKISUI CHEMICAL's long position.| National Retail vs. Apple Inc | National Retail vs. Apple Inc | National Retail vs. Apple Inc | National Retail vs. Apple Inc |
| SEKISUI CHEMICAL vs. PTT Global Chemical | SEKISUI CHEMICAL vs. Fair Isaac Corp | SEKISUI CHEMICAL vs. Norwegian Air Shuttle | SEKISUI CHEMICAL vs. DELTA AIR LINES |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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