Correlation Between National Retail and Mhlbauer Holding

Can any of the company-specific risk be diversified away by investing in both National Retail and Mhlbauer Holding 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 National Retail and Mhlbauer Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between National Retail Properties and Mhlbauer Holding AG, you can compare the effects of market volatilities on National Retail and Mhlbauer Holding 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 National Retail with a short position of Mhlbauer Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Retail and Mhlbauer Holding.

Diversification Opportunities for National Retail and Mhlbauer Holding

0.64

Correlation Coefficient

National Retail  Mhlbauer Holding

Poor diversification

The 3 months correlation between National and Mhlbauer is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding National Retail Properties and Mhlbauer Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mhlbauer Holding and National Retail 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 National Retail Properties are associated (or correlated) with Mhlbauer Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mhlbauer Holding has no effect on the direction of National Retail i.e., National Retail and Mhlbauer Holding go up and down completely randomly.

Pair Corralation between National Retail and Mhlbauer Holding

Assuming the 90 days trading horizon National Retail Properties is expected to generate 0.81 times more return on investment than Mhlbauer Holding. However, National Retail Properties is 1.24 times less risky than Mhlbauer Holding. It trades about -0.06 of its potential returns per unit of risk. Mhlbauer Holding AG is currently generating about -0.13 per unit of risk. If you would invest  4,294  in National Retail Properties on September 12, 2024 and sell it today you would lose (261.00) from holding National Retail Properties or give up 6.08% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.46%
Values	Daily Returns

National Retail Properties  vs.  Mhlbauer Holding AG

National Retail Prop

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days National Retail Properties has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, National Retail is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Mhlbauer Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mhlbauer Holding AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's fundamental drivers remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with National Retail and Mhlbauer Holding

The main advantage of trading using opposite National Retail and Mhlbauer Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Retail position performs unexpectedly, Mhlbauer Holding 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 Mhlbauer Holding will offset losses from the drop in Mhlbauer Holding's long position.

The idea behind National Retail Properties and Mhlbauer Holding AG 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.

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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.