Correlation Between Nationwide Building and Microlise Group
Can any of the company-specific risk be diversified away by investing in both Nationwide Building and Microlise Group 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 Nationwide Building and Microlise Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nationwide Building Society and Microlise Group PLC, you can compare the effects of market volatilities on Nationwide Building and Microlise Group 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 Nationwide Building with a short position of Microlise Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nationwide Building and Microlise Group.
Diversification Opportunities for Nationwide Building and Microlise Group
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nationwide and Microlise is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Nationwide Building Society and Microlise Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microlise Group PLC and Nationwide Building 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 Nationwide Building Society are associated (or correlated) with Microlise Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microlise Group PLC has no effect on the direction of Nationwide Building i.e., Nationwide Building and Microlise Group go up and down completely randomly.
Pair Corralation between Nationwide Building and Microlise Group
If you would invest 13,200 in Nationwide Building Society on September 2, 2024 and sell it today you would earn a total of 0.00 from holding Nationwide Building Society or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nationwide Building Society vs. Microlise Group PLC
Performance |
| Timeline |
| Nationwide Building |
| Microlise Group PLC |
Nationwide Building and Microlise Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nationwide Building and Microlise Group
The main advantage of trading using opposite Nationwide Building and Microlise Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nationwide Building position performs unexpectedly, Microlise Group 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 Microlise Group will offset losses from the drop in Microlise Group's long position.| Nationwide Building vs. Jacquet Metal Service | Nationwide Building vs. Power Metal Resources | Nationwide Building vs. Datalogic | Nationwide Building vs. Central Asia Metals |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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