Correlation Between KINGBOARD CHEMICAL and National Retail
Can any of the company-specific risk be diversified away by investing in both KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL and National Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KINGBOARD CHEMICAL and National Retail Properties, you can compare the effects of market volatilities on KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL with a short position of National Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of KINGBOARD CHEMICAL and National Retail.
Diversification Opportunities for KINGBOARD CHEMICAL and National Retail
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between KINGBOARD and National is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL i.e., KINGBOARD CHEMICAL and National Retail go up and down completely randomly.
Pair Corralation between KINGBOARD CHEMICAL and National Retail
Assuming the 90 days trading horizon KINGBOARD CHEMICAL is expected to generate 0.95 times more return on investment than National Retail. However, KINGBOARD CHEMICAL is 1.05 times less risky than National Retail. It trades about -0.01 of its potential returns per unit of risk. National Retail Properties is currently generating about -0.02 per unit of risk. If you would invest 228.00 in KINGBOARD CHEMICAL on August 29, 2024 and sell it today you would lose (2.00) from holding KINGBOARD CHEMICAL or give up 0.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KINGBOARD CHEMICAL vs. National Retail Properties
Performance |
| Timeline |
| KINGBOARD CHEMICAL |
| National Retail Prop |
KINGBOARD CHEMICAL and National Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KINGBOARD CHEMICAL and National Retail
The main advantage of trading using opposite KINGBOARD CHEMICAL and National Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KINGBOARD CHEMICAL 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.| KINGBOARD CHEMICAL vs. Apple Inc | KINGBOARD CHEMICAL vs. Apple Inc | KINGBOARD CHEMICAL vs. Microsoft | KINGBOARD CHEMICAL vs. Microsoft |
| National Retail vs. Apple Inc | National Retail vs. Apple Inc | National Retail vs. Apple Inc | National Retail vs. Apple Inc |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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