Correlation Between NatWest Group and Helium One
Can any of the company-specific risk be diversified away by investing in both NatWest Group and Helium One 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 Helium One 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 Helium One Global, you can compare the effects of market volatilities on NatWest Group and Helium One 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 Helium One. Check out your portfolio center. Please also check ongoing floating volatility patterns of NatWest Group and Helium One.
Diversification Opportunities for NatWest Group and Helium One
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NatWest and Helium is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding NatWest Group PLC and Helium One Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Helium One Global 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 Helium One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Helium One Global has no effect on the direction of NatWest Group i.e., NatWest Group and Helium One go up and down completely randomly.
Pair Corralation between NatWest Group and Helium One
Assuming the 90 days trading horizon NatWest Group PLC is expected to generate 0.3 times more return on investment than Helium One. However, NatWest Group PLC is 3.37 times less risky than Helium One. It trades about 0.28 of its potential returns per unit of risk. Helium One Global is currently generating about 0.08 per unit of risk. If you would invest 36,450 in NatWest Group PLC on August 30, 2024 and sell it today you would earn a total of 3,440 from holding NatWest Group PLC or generate 9.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NatWest Group PLC vs. Helium One Global
Performance |
| Timeline |
| NatWest Group PLC |
| Helium One Global |
NatWest Group and Helium One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NatWest Group and Helium One
The main advantage of trading using opposite NatWest Group and Helium One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NatWest Group position performs unexpectedly, Helium One 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 Helium One will offset losses from the drop in Helium One's long position.| NatWest Group vs. XLMedia PLC | NatWest Group vs. Pentair PLC | NatWest Group vs. Amedeo Air Four | NatWest Group vs. Systemair AB |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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