Correlation Between SC Asset and NCL International
Can any of the company-specific risk be diversified away by investing in both SC Asset and NCL International 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 SC Asset and NCL International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SC Asset and NCL International Logistics, you can compare the effects of market volatilities on SC Asset and NCL International 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 SC Asset with a short position of NCL International. Check out your portfolio center. Please also check ongoing floating volatility patterns of SC Asset and NCL International.
Diversification Opportunities for SC Asset and NCL International
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SC Asset and NCL is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding SC Asset and NCL International Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NCL International and SC Asset 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 SC Asset are associated (or correlated) with NCL International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NCL International has no effect on the direction of SC Asset i.e., SC Asset and NCL International go up and down completely randomly.
Pair Corralation between SC Asset and NCL International
Assuming the 90 days horizon SC Asset is expected to under-perform the NCL International. But the stock apears to be less risky and, when comparing its historical volatility, SC Asset is 4.74 times less risky than NCL International. The stock trades about -0.23 of its potential returns per unit of risk. The NCL International Logistics is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 49.00 in NCL International Logistics on September 1, 2024 and sell it today you would earn a total of 0.00 from holding NCL International Logistics or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
SC Asset vs. NCL International Logistics
Performance |
| Timeline |
| SC Asset |
| NCL International |
SC Asset and NCL International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SC Asset and NCL International
The main advantage of trading using opposite SC Asset and NCL International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SC Asset position performs unexpectedly, NCL International 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 NCL International will offset losses from the drop in NCL International's long position.The idea behind SC Asset and NCL International Logistics pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| NCL International vs. Kingsmen CMTI Public | NCL International vs. International Research | NCL International vs. Masterkool International Public | NCL International vs. News Network |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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