Correlation Between Mena Transport and NAT ABSOLUTE
Can any of the company-specific risk be diversified away by investing in both Mena Transport and NAT ABSOLUTE 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 Mena Transport and NAT ABSOLUTE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mena Transport Public and NAT ABSOLUTE TECHNOLOGIES, you can compare the effects of market volatilities on Mena Transport and NAT ABSOLUTE 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 Mena Transport with a short position of NAT ABSOLUTE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mena Transport and NAT ABSOLUTE.
Diversification Opportunities for Mena Transport and NAT ABSOLUTE
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Mena and NAT is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Mena Transport Public and NAT ABSOLUTE TECHNOLOGIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NAT ABSOLUTE TECHNOLOGIES and Mena Transport 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 Mena Transport Public are associated (or correlated) with NAT ABSOLUTE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NAT ABSOLUTE TECHNOLOGIES has no effect on the direction of Mena Transport i.e., Mena Transport and NAT ABSOLUTE go up and down completely randomly.
Pair Corralation between Mena Transport and NAT ABSOLUTE
Assuming the 90 days trading horizon Mena Transport Public is expected to generate 1.1 times more return on investment than NAT ABSOLUTE. However, Mena Transport is 1.1 times more volatile than NAT ABSOLUTE TECHNOLOGIES. It trades about 0.01 of its potential returns per unit of risk. NAT ABSOLUTE TECHNOLOGIES is currently generating about -0.04 per unit of risk. If you would invest 125.00 in Mena Transport Public on September 3, 2024 and sell it today you would lose (2.00) from holding Mena Transport Public or give up 1.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mena Transport Public vs. NAT ABSOLUTE TECHNOLOGIES
Performance |
| Timeline |
| Mena Transport Public |
| NAT ABSOLUTE TECHNOLOGIES |
Mena Transport and NAT ABSOLUTE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mena Transport and NAT ABSOLUTE
The main advantage of trading using opposite Mena Transport and NAT ABSOLUTE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mena Transport position performs unexpectedly, NAT ABSOLUTE 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 NAT ABSOLUTE will offset losses from the drop in NAT ABSOLUTE's long position.| Mena Transport vs. Mono Next Public | Mena Transport vs. Triple i Logistics | Mena Transport vs. Dynasty Ceramic Public | Mena Transport vs. The Erawan Group |
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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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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