Correlation Between Easy Software and National Retail
Can any of the company-specific risk be diversified away by investing in both Easy Software and National Retail 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 Easy Software and National Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Easy Software AG and National Retail Properties, you can compare the effects of market volatilities on Easy Software and National Retail 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 Easy Software with a short position of National Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Easy Software and National Retail.
Diversification Opportunities for Easy Software and National Retail
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Easy and National is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Easy Software AG and National Retail Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Retail Prop and Easy Software 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 Easy Software AG are associated (or correlated) with National Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Retail Prop has no effect on the direction of Easy Software i.e., Easy Software and National Retail go up and down completely randomly.
Pair Corralation between Easy Software and National Retail
Assuming the 90 days trading horizon Easy Software AG is expected to generate 2.78 times more return on investment than National Retail. However, Easy Software is 2.78 times more volatile than National Retail Properties. It trades about 0.13 of its potential returns per unit of risk. National Retail Properties is currently generating about -0.38 per unit of risk. If you would invest 1,630 in Easy Software AG on October 15, 2024 and sell it today you would earn a total of 110.00 from holding Easy Software AG or generate 6.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Easy Software AG vs. National Retail Properties
Performance |
| Timeline |
| Easy Software AG |
| National Retail Prop |
Easy Software and National Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Easy Software and National Retail
The main advantage of trading using opposite Easy Software and National Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Easy Software position performs unexpectedly, National Retail 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 National Retail will offset losses from the drop in National Retail's long position.| Easy Software vs. SOCKET MOBILE NEW | Easy Software vs. MOBILE FACTORY INC | Easy Software vs. United Rentals | Easy Software vs. INTERSHOP Communications Aktiengesellschaft |
| National Retail vs. Gladstone Investment | National Retail vs. BG Foods | National Retail vs. Guangdong Investment Limited | National Retail vs. Cal Maine Foods |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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