Correlation Between FINCORP INVESTMENT and NATIONAL INVESTMENT
Can any of the company-specific risk be diversified away by investing in both FINCORP INVESTMENT and NATIONAL INVESTMENT 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 FINCORP INVESTMENT and NATIONAL INVESTMENT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FINCORP INVESTMENT LTD and NATIONAL INVESTMENT TRUST, you can compare the effects of market volatilities on FINCORP INVESTMENT and NATIONAL INVESTMENT 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 FINCORP INVESTMENT with a short position of NATIONAL INVESTMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of FINCORP INVESTMENT and NATIONAL INVESTMENT.
Diversification Opportunities for FINCORP INVESTMENT and NATIONAL INVESTMENT
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FINCORP and NATIONAL is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding FINCORP INVESTMENT LTD and NATIONAL INVESTMENT TRUST in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NATIONAL INVESTMENT TRUST and FINCORP INVESTMENT 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 FINCORP INVESTMENT LTD are associated (or correlated) with NATIONAL INVESTMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NATIONAL INVESTMENT TRUST has no effect on the direction of FINCORP INVESTMENT i.e., FINCORP INVESTMENT and NATIONAL INVESTMENT go up and down completely randomly.
Pair Corralation between FINCORP INVESTMENT and NATIONAL INVESTMENT
Assuming the 90 days trading horizon FINCORP INVESTMENT LTD is expected to under-perform the NATIONAL INVESTMENT. But the stock apears to be less risky and, when comparing its historical volatility, FINCORP INVESTMENT LTD is 2.37 times less risky than NATIONAL INVESTMENT. The stock trades about -0.11 of its potential returns per unit of risk. The NATIONAL INVESTMENT TRUST is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 1,160 in NATIONAL INVESTMENT TRUST on August 30, 2024 and sell it today you would lose (60.00) from holding NATIONAL INVESTMENT TRUST or give up 5.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FINCORP INVESTMENT LTD vs. NATIONAL INVESTMENT TRUST
Performance |
| Timeline |
| FINCORP INVESTMENT LTD |
| NATIONAL INVESTMENT TRUST |
FINCORP INVESTMENT and NATIONAL INVESTMENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FINCORP INVESTMENT and NATIONAL INVESTMENT
The main advantage of trading using opposite FINCORP INVESTMENT and NATIONAL INVESTMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FINCORP INVESTMENT position performs unexpectedly, NATIONAL INVESTMENT 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 INVESTMENT will offset losses from the drop in NATIONAL INVESTMENT's long position.| FINCORP INVESTMENT vs. PSG FINANCIAL SERVICES | FINCORP INVESTMENT vs. NEW MAURITIUS HOTELS | FINCORP INVESTMENT vs. MIWA SUGAR LIMITED | FINCORP INVESTMENT vs. QUALITY BEVERAGES LTD |
| NATIONAL INVESTMENT vs. FINCORP INVESTMENT LTD | NATIONAL INVESTMENT vs. PSG FINANCIAL SERVICES | NATIONAL INVESTMENT vs. NEW MAURITIUS HOTELS | NATIONAL INVESTMENT vs. MIWA SUGAR LIMITED |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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