Correlation Between NATIONAL INVESTMENT and MALAWI PROPERTY
Can any of the company-specific risk be diversified away by investing in both NATIONAL INVESTMENT and MALAWI PROPERTY 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 NATIONAL INVESTMENT and MALAWI PROPERTY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NATIONAL INVESTMENT TRUST and MALAWI PROPERTY INVESTMENT, you can compare the effects of market volatilities on NATIONAL INVESTMENT and MALAWI PROPERTY 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 NATIONAL INVESTMENT with a short position of MALAWI PROPERTY. Check out your portfolio center. Please also check ongoing floating volatility patterns of NATIONAL INVESTMENT and MALAWI PROPERTY.
Diversification Opportunities for NATIONAL INVESTMENT and MALAWI PROPERTY
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NATIONAL and MALAWI is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding NATIONAL INVESTMENT TRUST and MALAWI PROPERTY INVESTMENT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MALAWI PROPERTY INVE and NATIONAL INVESTMENT 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 NATIONAL INVESTMENT TRUST are associated (or correlated) with MALAWI PROPERTY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MALAWI PROPERTY INVE has no effect on the direction of NATIONAL INVESTMENT i.e., NATIONAL INVESTMENT and MALAWI PROPERTY go up and down completely randomly.
Pair Corralation between NATIONAL INVESTMENT and MALAWI PROPERTY
Assuming the 90 days trading horizon NATIONAL INVESTMENT TRUST is expected to generate 1.23 times more return on investment than MALAWI PROPERTY. However, NATIONAL INVESTMENT is 1.23 times more volatile than MALAWI PROPERTY INVESTMENT. It trades about 0.14 of its potential returns per unit of risk. MALAWI PROPERTY INVESTMENT is currently generating about -0.01 per unit of risk. If you would invest 16,400 in NATIONAL INVESTMENT TRUST on November 2, 2024 and sell it today you would earn a total of 27,602 from holding NATIONAL INVESTMENT TRUST or generate 168.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NATIONAL INVESTMENT TRUST vs. MALAWI PROPERTY INVESTMENT
Performance |
| Timeline |
| NATIONAL INVESTMENT TRUST |
| MALAWI PROPERTY INVE |
NATIONAL INVESTMENT and MALAWI PROPERTY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NATIONAL INVESTMENT and MALAWI PROPERTY
The main advantage of trading using opposite NATIONAL INVESTMENT and MALAWI PROPERTY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NATIONAL INVESTMENT position performs unexpectedly, MALAWI PROPERTY 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 MALAWI PROPERTY will offset losses from the drop in MALAWI PROPERTY's long position.The idea behind NATIONAL INVESTMENT TRUST and MALAWI PROPERTY INVESTMENT pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| MALAWI PROPERTY vs. NATIONAL INVESTMENT TRUST | MALAWI PROPERTY vs. FDH BANK PLC | MALAWI PROPERTY vs. STANDARD BANK LIMITED | MALAWI PROPERTY vs. SUNBIRD HOTELS TOURISM |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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