Correlation Between NACCO Industries and Sachem Capital
Can any of the company-specific risk be diversified away by investing in both NACCO Industries and Sachem Capital 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 NACCO Industries and Sachem Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NACCO Industries and Sachem Capital Corp, you can compare the effects of market volatilities on NACCO Industries and Sachem Capital 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 NACCO Industries with a short position of Sachem Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of NACCO Industries and Sachem Capital.
Diversification Opportunities for NACCO Industries and Sachem Capital
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NACCO and Sachem is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding NACCO Industries and Sachem Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sachem Capital Corp and NACCO Industries 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 NACCO Industries are associated (or correlated) with Sachem Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sachem Capital Corp has no effect on the direction of NACCO Industries i.e., NACCO Industries and Sachem Capital go up and down completely randomly.
Pair Corralation between NACCO Industries and Sachem Capital
Allowing for the 90-day total investment horizon NACCO Industries is expected to generate 18.48 times more return on investment than Sachem Capital. However, NACCO Industries is 18.48 times more volatile than Sachem Capital Corp. It trades about 0.1 of its potential returns per unit of risk. Sachem Capital Corp is currently generating about 0.18 per unit of risk. If you would invest 2,798 in NACCO Industries on August 28, 2024 and sell it today you would earn a total of 431.00 from holding NACCO Industries or generate 15.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NACCO Industries vs. Sachem Capital Corp
Performance |
| Timeline |
| NACCO Industries |
| Sachem Capital Corp |
NACCO Industries and Sachem Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NACCO Industries and Sachem Capital
The main advantage of trading using opposite NACCO Industries and Sachem Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NACCO Industries position performs unexpectedly, Sachem Capital 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 Sachem Capital will offset losses from the drop in Sachem Capital's long position.| NACCO Industries vs. Alliance Resource Partners | NACCO Industries vs. Hallador Energy | NACCO Industries vs. Consol Energy | NACCO Industries vs. Indo Tambangraya Megah |
| Sachem Capital vs. Sachem Capital Corp | Sachem Capital vs. Eagle Point Credit | Sachem Capital vs. B Riley Financial |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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