Correlation Between National Atomic and Gaming Realms

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

By analyzing existing cross correlation between National Atomic Co and Gaming Realms plc, you can compare the effects of market volatilities on National Atomic and Gaming Realms 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 Atomic with a short position of Gaming Realms. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Atomic and Gaming Realms.

Diversification Opportunities for National Atomic and Gaming Realms

-0.48

Correlation Coefficient

National Atomic  Gaming Realms

Very good diversification

The 3 months correlation between National and Gaming is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding National Atomic Co and Gaming Realms plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaming Realms plc and National Atomic 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 Atomic Co are associated (or correlated) with Gaming Realms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaming Realms plc has no effect on the direction of National Atomic i.e., National Atomic and Gaming Realms go up and down completely randomly.

Pair Corralation between National Atomic and Gaming Realms

Assuming the 90 days trading horizon National Atomic Co is expected to generate 0.73 times more return on investment than Gaming Realms. However, National Atomic Co is 1.37 times less risky than Gaming Realms. It trades about 0.01 of its potential returns per unit of risk. Gaming Realms plc is currently generating about -0.04 per unit of risk. If you would invest  3,910  in National Atomic Co on September 12, 2024 and sell it today you would earn a total of  25.00  from holding National Atomic Co or generate 0.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

National Atomic Co  vs.  Gaming Realms plc

National Atomic

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in National Atomic Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, National Atomic is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Gaming Realms plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gaming Realms plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with National Atomic and Gaming Realms

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

The idea behind National Atomic Co and Gaming Realms plc 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.