Correlation Between UNION and NL Industries
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By analyzing existing cross correlation between UNION ELEC 39 and NL Industries, you can compare the effects of market volatilities on UNION and NL Industries 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 UNION with a short position of NL Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNION and NL Industries.
Diversification Opportunities for UNION and NL Industries
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between UNION and NL Industries is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding UNION ELEC 39 and NL Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NL Industries and UNION 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 UNION ELEC 39 are associated (or correlated) with NL Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NL Industries has no effect on the direction of UNION i.e., UNION and NL Industries go up and down completely randomly.
Pair Corralation between UNION and NL Industries
Assuming the 90 days trading horizon UNION ELEC 39 is expected to generate 0.39 times more return on investment than NL Industries. However, UNION ELEC 39 is 2.55 times less risky than NL Industries. It trades about 0.43 of its potential returns per unit of risk. NL Industries is currently generating about 0.09 per unit of risk. If you would invest 8,225 in UNION ELEC 39 on September 3, 2024 and sell it today you would earn a total of 511.00 from holding UNION ELEC 39 or generate 6.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 50.0% |
| Values | Daily Returns |
UNION ELEC 39 vs. NL Industries
Performance |
| Timeline |
| UNION ELEC |
| NL Industries |
UNION and NL Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UNION and NL Industries
The main advantage of trading using opposite UNION and NL Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNION position performs unexpectedly, NL Industries 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 NL Industries will offset losses from the drop in NL Industries' long position.| UNION vs. Playtika Holding Corp | UNION vs. Dave Busters Entertainment | UNION vs. Xponential Fitness | UNION vs. NL Industries |
| NL Industries vs. Brinks Company | NL Industries vs. Allegion PLC | NL Industries vs. Resideo Technologies | NL Industries vs. Mistras Group |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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