Correlation Between NAT ABSOLUTE and Micro Leasing
Can any of the company-specific risk be diversified away by investing in both NAT ABSOLUTE and Micro Leasing 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 NAT ABSOLUTE and Micro Leasing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NAT ABSOLUTE TECHNOLOGIES and Micro Leasing Public, you can compare the effects of market volatilities on NAT ABSOLUTE and Micro Leasing 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 NAT ABSOLUTE with a short position of Micro Leasing. Check out your portfolio center. Please also check ongoing floating volatility patterns of NAT ABSOLUTE and Micro Leasing.
Diversification Opportunities for NAT ABSOLUTE and Micro Leasing
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NAT and Micro is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding NAT ABSOLUTE TECHNOLOGIES and Micro Leasing Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Micro Leasing Public and NAT ABSOLUTE 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 NAT ABSOLUTE TECHNOLOGIES are associated (or correlated) with Micro Leasing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Micro Leasing Public has no effect on the direction of NAT ABSOLUTE i.e., NAT ABSOLUTE and Micro Leasing go up and down completely randomly.
Pair Corralation between NAT ABSOLUTE and Micro Leasing
Assuming the 90 days trading horizon NAT ABSOLUTE TECHNOLOGIES is expected to generate 0.3 times more return on investment than Micro Leasing. However, NAT ABSOLUTE TECHNOLOGIES is 3.36 times less risky than Micro Leasing. It trades about -0.49 of its potential returns per unit of risk. Micro Leasing Public is currently generating about -0.47 per unit of risk. If you would invest 482.00 in NAT ABSOLUTE TECHNOLOGIES on August 30, 2024 and sell it today you would lose (50.00) from holding NAT ABSOLUTE TECHNOLOGIES or give up 10.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
NAT ABSOLUTE TECHNOLOGIES vs. Micro Leasing Public
Performance |
| Timeline |
| NAT ABSOLUTE TECHNOLOGIES |
| Micro Leasing Public |
NAT ABSOLUTE and Micro Leasing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NAT ABSOLUTE and Micro Leasing
The main advantage of trading using opposite NAT ABSOLUTE and Micro Leasing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NAT ABSOLUTE position performs unexpectedly, Micro Leasing 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 Micro Leasing will offset losses from the drop in Micro Leasing's long position.| NAT ABSOLUTE vs. Delta Electronics Public | NAT ABSOLUTE vs. Delta Electronics Public | NAT ABSOLUTE vs. Airports of Thailand | NAT ABSOLUTE vs. Airports of Thailand |
| Micro Leasing vs. Amanah Leasing Public | Micro Leasing vs. Infraset Public | Micro Leasing vs. JMT Network Services |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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