Correlation Between Newcity Public and Nfc PLC
Can any of the company-specific risk be diversified away by investing in both Newcity Public and Nfc PLC 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 Newcity Public and Nfc PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newcity Public and Nfc PLC, you can compare the effects of market volatilities on Newcity Public and Nfc PLC 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 Newcity Public with a short position of Nfc PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newcity Public and Nfc PLC.
Diversification Opportunities for Newcity Public and Nfc PLC
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Newcity and Nfc is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Newcity Public and Nfc PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nfc PLC and Newcity Public 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 Newcity Public are associated (or correlated) with Nfc PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nfc PLC has no effect on the direction of Newcity Public i.e., Newcity Public and Nfc PLC go up and down completely randomly.
Pair Corralation between Newcity Public and Nfc PLC
Assuming the 90 days horizon Newcity Public is expected to generate 1.82 times more return on investment than Nfc PLC. However, Newcity Public is 1.82 times more volatile than Nfc PLC. It trades about 0.09 of its potential returns per unit of risk. Nfc PLC is currently generating about -0.04 per unit of risk. If you would invest 230.00 in Newcity Public on November 3, 2024 and sell it today you would earn a total of 22.00 from holding Newcity Public or generate 9.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Newcity Public vs. Nfc PLC
Performance |
| Timeline |
| Newcity Public |
| Nfc PLC |
Newcity Public and Nfc PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newcity Public and Nfc PLC
The main advantage of trading using opposite Newcity Public and Nfc PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newcity Public position performs unexpectedly, Nfc PLC 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 Nfc PLC will offset losses from the drop in Nfc PLC's long position.| Newcity Public vs. Ocean Glass Public | Newcity Public vs. OCC Public | Newcity Public vs. Wattana Karnpaet Public | Newcity Public vs. Peoples Garment Public |
| Nfc PLC vs. Lam Soon Public | Nfc PLC vs. Newcity Public | Nfc PLC vs. Metro Systems | Nfc PLC vs. Nonthavej Hospital Public |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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