Correlation Between National Atomic and Jadestone Energy
Can any of the company-specific risk be diversified away by investing in both National Atomic and Jadestone Energy 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 Atomic and Jadestone Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Atomic Co and Jadestone Energy, you can compare the effects of market volatilities on National Atomic and Jadestone Energy 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 Atomic with a short position of Jadestone Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Atomic and Jadestone Energy.
Diversification Opportunities for National Atomic and Jadestone Energy
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between National and Jadestone is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding National Atomic Co and Jadestone Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jadestone Energy and National Atomic 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 Atomic Co are associated (or correlated) with Jadestone Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jadestone Energy has no effect on the direction of National Atomic i.e., National Atomic and Jadestone Energy go up and down completely randomly.
Pair Corralation between National Atomic and Jadestone Energy
Assuming the 90 days trading horizon National Atomic Co is expected to generate 0.64 times more return on investment than Jadestone Energy. However, National Atomic Co is 1.57 times less risky than Jadestone Energy. It trades about 0.24 of its potential returns per unit of risk. Jadestone Energy is currently generating about -0.06 per unit of risk. If you would invest 3,810 in National Atomic Co on September 3, 2024 and sell it today you would earn a total of 235.00 from holding National Atomic Co or generate 6.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Atomic Co vs. Jadestone Energy
Performance |
| Timeline |
| National Atomic |
| Jadestone Energy |
National Atomic and Jadestone Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Atomic and Jadestone Energy
The main advantage of trading using opposite National Atomic and Jadestone Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Atomic position performs unexpectedly, Jadestone Energy 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 Jadestone Energy will offset losses from the drop in Jadestone Energy's long position.| National Atomic vs. Fevertree Drinks Plc | National Atomic vs. Supermarket Income REIT | National Atomic vs. Beazer Homes USA | National Atomic vs. Ecclesiastical Insurance Office |
| Jadestone Energy vs. Bankers Investment Trust | Jadestone Energy vs. Fresenius Medical Care | Jadestone Energy vs. Creo Medical Group | Jadestone Energy vs. Livermore Investments Group |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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