Correlation Between NAT ABSOLUTE and General Environmental

Can any of the company-specific risk be diversified away by investing in both NAT ABSOLUTE and General Environmental 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 NAT ABSOLUTE and General Environmental into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NAT ABSOLUTE TECHNOLOGIES and General Environmental Conservation, you can compare the effects of market volatilities on NAT ABSOLUTE and General Environmental 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 NAT ABSOLUTE with a short position of General Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of NAT ABSOLUTE and General Environmental.

Diversification Opportunities for NAT ABSOLUTE and General Environmental

0.14

Correlation Coefficient

NAT ABSOLUTE  General Environmental

Average diversification

The 3 months correlation between NAT and General is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding NAT ABSOLUTE TECHNOLOGIES and General Environmental Conserva in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Environmental and NAT ABSOLUTE 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 NAT ABSOLUTE TECHNOLOGIES are associated (or correlated) with General Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Environmental has no effect on the direction of NAT ABSOLUTE i.e., NAT ABSOLUTE and General Environmental go up and down completely randomly.

Pair Corralation between NAT ABSOLUTE and General Environmental

Assuming the 90 days trading horizon NAT ABSOLUTE TECHNOLOGIES is expected to under-perform the General Environmental. In addition to that, NAT ABSOLUTE is 1.19 times more volatile than General Environmental Conservation. It trades about -0.05 of its total potential returns per unit of risk. General Environmental Conservation is currently generating about 0.03 per unit of volatility. If you would invest  47.00  in General Environmental Conservation on September 5, 2024 and sell it today you would earn a total of  1.00  from holding General Environmental Conservation or generate 2.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

NAT ABSOLUTE TECHNOLOGIES  vs.  General Environmental Conserva

NAT ABSOLUTE TECHNOLOGIES

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NAT ABSOLUTE TECHNOLOGIES has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

General Environmental

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in General Environmental Conservation are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, General Environmental is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with NAT ABSOLUTE and General Environmental

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

The idea behind NAT ABSOLUTE TECHNOLOGIES and General Environmental Conservation 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.