Correlation Between NatWest Group and Eco Animal
Can any of the company-specific risk be diversified away by investing in both NatWest Group and Eco Animal 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 NatWest Group and Eco Animal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NatWest Group PLC and Eco Animal Health, you can compare the effects of market volatilities on NatWest Group and Eco Animal 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 NatWest Group with a short position of Eco Animal. Check out your portfolio center. Please also check ongoing floating volatility patterns of NatWest Group and Eco Animal.
Diversification Opportunities for NatWest Group and Eco Animal
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NatWest and Eco is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding NatWest Group PLC and Eco Animal Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eco Animal Health and NatWest Group 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 NatWest Group PLC are associated (or correlated) with Eco Animal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eco Animal Health has no effect on the direction of NatWest Group i.e., NatWest Group and Eco Animal go up and down completely randomly.
Pair Corralation between NatWest Group and Eco Animal
Assuming the 90 days trading horizon NatWest Group PLC is expected to generate 0.71 times more return on investment than Eco Animal. However, NatWest Group PLC is 1.41 times less risky than Eco Animal. It trades about 0.05 of its potential returns per unit of risk. Eco Animal Health is currently generating about -0.03 per unit of risk. If you would invest 26,337 in NatWest Group PLC on August 30, 2024 and sell it today you would earn a total of 12,913 from holding NatWest Group PLC or generate 49.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
NatWest Group PLC vs. Eco Animal Health
Performance |
| Timeline |
| NatWest Group PLC |
| Eco Animal Health |
NatWest Group and Eco Animal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NatWest Group and Eco Animal
The main advantage of trading using opposite NatWest Group and Eco Animal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NatWest Group position performs unexpectedly, Eco Animal 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 Eco Animal will offset losses from the drop in Eco Animal's long position.| NatWest Group vs. Toyota Motor Corp | NatWest Group vs. Neometals | NatWest Group vs. Coor Service Management | NatWest Group vs. JPMorgan ETFs ICAV |
| Eco Animal vs. Samsung Electronics Co | Eco Animal vs. Samsung Electronics Co | Eco Animal vs. Hyundai Motor | Eco Animal vs. Toyota Motor Corp |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |