Correlation Between National Research and NetraMark Holdings
Can any of the company-specific risk be diversified away by investing in both National Research and NetraMark Holdings 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 Research and NetraMark Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Research Corp and NetraMark Holdings, you can compare the effects of market volatilities on National Research and NetraMark Holdings 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 Research with a short position of NetraMark Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Research and NetraMark Holdings.
Diversification Opportunities for National Research and NetraMark Holdings
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between National and NetraMark is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding National Research Corp and NetraMark Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NetraMark Holdings and National Research 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 Research Corp are associated (or correlated) with NetraMark Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NetraMark Holdings has no effect on the direction of National Research i.e., National Research and NetraMark Holdings go up and down completely randomly.
Pair Corralation between National Research and NetraMark Holdings
Considering the 90-day investment horizon National Research Corp is expected to under-perform the NetraMark Holdings. But the stock apears to be less risky and, when comparing its historical volatility, National Research Corp is 3.37 times less risky than NetraMark Holdings. The stock trades about -0.18 of its potential returns per unit of risk. The NetraMark Holdings is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 57.00 in NetraMark Holdings on November 30, 2024 and sell it today you would earn a total of 42.00 from holding NetraMark Holdings or generate 73.68% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 95.45% |
Values | Daily Returns |
National Research Corp vs. NetraMark Holdings
Performance |
Timeline |
National Research Corp |
NetraMark Holdings |
National Research and NetraMark Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with National Research and NetraMark Holdings
The main advantage of trading using opposite National Research and NetraMark Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Research position performs unexpectedly, NetraMark Holdings 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 NetraMark Holdings will offset losses from the drop in NetraMark Holdings' long position.National Research vs. Omega Flex | ||
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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