Correlation Between NATIONAL INVESTMENT and UNITED INVESTMENTS
Can any of the company-specific risk be diversified away by investing in both NATIONAL INVESTMENT and UNITED INVESTMENTS 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 UNITED INVESTMENTS 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 UNITED INVESTMENTS LTD, you can compare the effects of market volatilities on NATIONAL INVESTMENT and UNITED INVESTMENTS 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 UNITED INVESTMENTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of NATIONAL INVESTMENT and UNITED INVESTMENTS.
Diversification Opportunities for NATIONAL INVESTMENT and UNITED INVESTMENTS
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between NATIONAL and UNITED is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding NATIONAL INVESTMENT TRUST and UNITED INVESTMENTS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNITED INVESTMENTS 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 UNITED INVESTMENTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNITED INVESTMENTS LTD has no effect on the direction of NATIONAL INVESTMENT i.e., NATIONAL INVESTMENT and UNITED INVESTMENTS go up and down completely randomly.
Pair Corralation between NATIONAL INVESTMENT and UNITED INVESTMENTS
Assuming the 90 days trading horizon NATIONAL INVESTMENT TRUST is expected to generate 1.33 times more return on investment than UNITED INVESTMENTS. However, NATIONAL INVESTMENT is 1.33 times more volatile than UNITED INVESTMENTS LTD. It trades about -0.07 of its potential returns per unit of risk. UNITED INVESTMENTS LTD is currently generating about -0.12 per unit of risk. If you would invest 1,200 in NATIONAL INVESTMENT TRUST on August 28, 2024 and sell it today you would lose (100.00) from holding NATIONAL INVESTMENT TRUST or give up 8.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NATIONAL INVESTMENT TRUST vs. UNITED INVESTMENTS LTD
Performance |
| Timeline |
| NATIONAL INVESTMENT TRUST |
| UNITED INVESTMENTS LTD |
NATIONAL INVESTMENT and UNITED INVESTMENTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NATIONAL INVESTMENT and UNITED INVESTMENTS
The main advantage of trading using opposite NATIONAL INVESTMENT and UNITED INVESTMENTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NATIONAL INVESTMENT position performs unexpectedly, UNITED INVESTMENTS 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 UNITED INVESTMENTS will offset losses from the drop in UNITED INVESTMENTS'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 |
| UNITED INVESTMENTS vs. MCB GROUP LTD | UNITED INVESTMENTS vs. LOTTOTECH LTD | UNITED INVESTMENTS vs. NEW MAURITIUS HOTELS | UNITED INVESTMENTS 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 CEOs Directory module to screen CEOs from public companies around the world.
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