Correlation Between NATIONAL INVESTMENT and PLASTIC INDUSTRY
Can any of the company-specific risk be diversified away by investing in both NATIONAL INVESTMENT and PLASTIC INDUSTRY 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 PLASTIC INDUSTRY 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 PLASTIC INDUSTRY LTD, you can compare the effects of market volatilities on NATIONAL INVESTMENT and PLASTIC INDUSTRY 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 PLASTIC INDUSTRY. Check out your portfolio center. Please also check ongoing floating volatility patterns of NATIONAL INVESTMENT and PLASTIC INDUSTRY.
Diversification Opportunities for NATIONAL INVESTMENT and PLASTIC INDUSTRY
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NATIONAL and PLASTIC is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding NATIONAL INVESTMENT TRUST and PLASTIC INDUSTRY LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLASTIC INDUSTRY LTD 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 PLASTIC INDUSTRY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLASTIC INDUSTRY LTD has no effect on the direction of NATIONAL INVESTMENT i.e., NATIONAL INVESTMENT and PLASTIC INDUSTRY go up and down completely randomly.
Pair Corralation between NATIONAL INVESTMENT and PLASTIC INDUSTRY
Assuming the 90 days trading horizon NATIONAL INVESTMENT TRUST is expected to under-perform the PLASTIC INDUSTRY. In addition to that, NATIONAL INVESTMENT is 2.05 times more volatile than PLASTIC INDUSTRY LTD. It trades about -0.07 of its total potential returns per unit of risk. PLASTIC INDUSTRY LTD is currently generating about -0.12 per unit of volatility. If you would invest 4,500 in PLASTIC INDUSTRY LTD on August 28, 2024 and sell it today you would lose (250.00) from holding PLASTIC INDUSTRY LTD or give up 5.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NATIONAL INVESTMENT TRUST vs. PLASTIC INDUSTRY LTD
Performance |
| Timeline |
| NATIONAL INVESTMENT TRUST |
| PLASTIC INDUSTRY LTD |
NATIONAL INVESTMENT and PLASTIC INDUSTRY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NATIONAL INVESTMENT and PLASTIC INDUSTRY
The main advantage of trading using opposite NATIONAL INVESTMENT and PLASTIC INDUSTRY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NATIONAL INVESTMENT position performs unexpectedly, PLASTIC INDUSTRY 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 PLASTIC INDUSTRY will offset losses from the drop in PLASTIC INDUSTRY's long position.| NATIONAL INVESTMENT vs. MCB GROUP LTD | NATIONAL INVESTMENT vs. LOTTOTECH LTD | NATIONAL INVESTMENT vs. NEW MAURITIUS HOTELS | NATIONAL INVESTMENT vs. MIWA SUGAR LIMITED |
| PLASTIC INDUSTRY vs. MCB GROUP LTD | PLASTIC INDUSTRY vs. LOTTOTECH LTD | PLASTIC INDUSTRY vs. NEW MAURITIUS HOTELS | PLASTIC INDUSTRY vs. MIWA SUGAR LIMITED |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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