Correlation Between NatWest Group and Picton Property
Can any of the company-specific risk be diversified away by investing in both NatWest Group and Picton Property 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 Picton Property 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 Picton Property Income, you can compare the effects of market volatilities on NatWest Group and Picton Property 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 Picton Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of NatWest Group and Picton Property.
Diversification Opportunities for NatWest Group and Picton Property
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NatWest and Picton is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding NatWest Group PLC and Picton Property Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Picton Property Income 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 Picton Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Picton Property Income has no effect on the direction of NatWest Group i.e., NatWest Group and Picton Property go up and down completely randomly.
Pair Corralation between NatWest Group and Picton Property
Assuming the 90 days trading horizon NatWest Group is expected to generate 1.25 times less return on investment than Picton Property. In addition to that, NatWest Group is 1.1 times more volatile than Picton Property Income. It trades about 0.19 of its total potential returns per unit of risk. Picton Property Income is currently generating about 0.26 per unit of volatility. If you would invest 6,022 in Picton Property Income on November 28, 2024 and sell it today you would earn a total of 568.00 from holding Picton Property Income or generate 9.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NatWest Group PLC vs. Picton Property Income
Performance |
| Timeline |
| NatWest Group PLC |
| Picton Property Income |
NatWest Group and Picton Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NatWest Group and Picton Property
The main advantage of trading using opposite NatWest Group and Picton Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NatWest Group position performs unexpectedly, Picton Property 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 Picton Property will offset losses from the drop in Picton Property's long position.| NatWest Group vs. Air Products Chemicals | NatWest Group vs. SBM Offshore NV | NatWest Group vs. Systemair AB | NatWest Group vs. Solstad Offshore ASA |
| Picton Property vs. Orient Telecoms | Picton Property vs. JD Sports Fashion | Picton Property vs. Verizon Communications | Picton Property vs. Spirent Communications plc |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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