Correlation Between Pick N and National Retail
Can any of the company-specific risk be diversified away by investing in both Pick N and National Retail 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 Pick N and National Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pick n Pay and National Retail Properties, you can compare the effects of market volatilities on Pick N and National Retail 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 Pick N with a short position of National Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pick N and National Retail.
Diversification Opportunities for Pick N and National Retail
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Pick and National is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Pick n Pay and National Retail Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Retail Prop and Pick N 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 Pick n Pay are associated (or correlated) with National Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Retail Prop has no effect on the direction of Pick N i.e., Pick N and National Retail go up and down completely randomly.
Pair Corralation between Pick N and National Retail
Assuming the 90 days horizon Pick n Pay is expected to generate 23.99 times more return on investment than National Retail. However, Pick N is 23.99 times more volatile than National Retail Properties. It trades about 0.04 of its potential returns per unit of risk. National Retail Properties is currently generating about 0.02 per unit of risk. If you would invest 330.00 in Pick n Pay on September 2, 2024 and sell it today you would lose (175.00) from holding Pick n Pay or give up 53.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pick n Pay vs. National Retail Properties
Performance |
| Timeline |
| Pick n Pay |
| National Retail Prop |
Pick N and National Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pick N and National Retail
The main advantage of trading using opposite Pick N and National Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pick N position performs unexpectedly, National Retail 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 National Retail will offset losses from the drop in National Retail's long position.| Pick N vs. Taiwan Semiconductor Manufacturing | Pick N vs. AUSTEVOLL SEAFOOD | Pick N vs. Tower Semiconductor | Pick N vs. CN MODERN DAIRY |
| National Retail vs. Apple Inc | National Retail vs. Apple Inc | National Retail vs. Apple Inc | National Retail vs. Apple Inc |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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