Correlation Between Supermarket Income and NatWest Group
Can any of the company-specific risk be diversified away by investing in both Supermarket Income and NatWest Group 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 Supermarket Income and NatWest Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Supermarket Income REIT and NatWest Group PLC, you can compare the effects of market volatilities on Supermarket Income and NatWest Group 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 Supermarket Income with a short position of NatWest Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Supermarket Income and NatWest Group.
Diversification Opportunities for Supermarket Income and NatWest Group
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Supermarket and NatWest is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Supermarket Income REIT and NatWest Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NatWest Group PLC and Supermarket Income 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 Supermarket Income REIT are associated (or correlated) with NatWest Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NatWest Group PLC has no effect on the direction of Supermarket Income i.e., Supermarket Income and NatWest Group go up and down completely randomly.
Pair Corralation between Supermarket Income and NatWest Group
Assuming the 90 days trading horizon Supermarket Income is expected to generate 18.03 times less return on investment than NatWest Group. But when comparing it to its historical volatility, Supermarket Income REIT is 1.12 times less risky than NatWest Group. It trades about 0.0 of its potential returns per unit of risk. NatWest Group PLC is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 26,067 in NatWest Group PLC on September 2, 2024 and sell it today you would earn a total of 14,203 from holding NatWest Group PLC or generate 54.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Supermarket Income REIT vs. NatWest Group PLC
Performance |
| Timeline |
| Supermarket Income REIT |
| NatWest Group PLC |
Supermarket Income and NatWest Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Supermarket Income and NatWest Group
The main advantage of trading using opposite Supermarket Income and NatWest Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Supermarket Income position performs unexpectedly, NatWest Group 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 NatWest Group will offset losses from the drop in NatWest Group's long position.| Supermarket Income vs. Derwent London PLC | Supermarket Income vs. Workspace Group PLC | Supermarket Income vs. Diversified Energy | Supermarket Income vs. Thyssenkrupp AG ON |
| NatWest Group vs. Samsung Electronics Co | NatWest Group vs. Iron Mountain | NatWest Group vs. InterContinental Hotels Group | NatWest Group vs. Veolia Environnement VE |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |