Correlation Between National Reinsurance and Puregold Price

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

By analyzing existing cross correlation between National Reinsurance and Puregold Price Club, you can compare the effects of market volatilities on National Reinsurance and Puregold Price 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 Reinsurance with a short position of Puregold Price. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Reinsurance and Puregold Price.

Diversification Opportunities for National Reinsurance and Puregold Price

0.49

Correlation Coefficient

National Reinsurance  Puregold Price

Very weak diversification

The 3 months correlation between National and Puregold is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding National Reinsurance and Puregold Price Club in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Puregold Price Club and National Reinsurance 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 Reinsurance are associated (or correlated) with Puregold Price. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Puregold Price Club has no effect on the direction of National Reinsurance i.e., National Reinsurance and Puregold Price go up and down completely randomly.

Pair Corralation between National Reinsurance and Puregold Price

Assuming the 90 days trading horizon National Reinsurance is expected to under-perform the Puregold Price. In addition to that, National Reinsurance is 2.28 times more volatile than Puregold Price Club. It trades about -0.03 of its total potential returns per unit of risk. Puregold Price Club is currently generating about 0.04 per unit of volatility. If you would invest  2,920  in Puregold Price Club on September 14, 2024 and sell it today you would earn a total of  130.00  from holding Puregold Price Club or generate 4.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.31%
Values	Daily Returns

National Reinsurance  vs.  Puregold Price Club

National Reinsurance

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days National Reinsurance has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Puregold Price Club

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Puregold Price Club are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Puregold Price is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with National Reinsurance and Puregold Price

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

The idea behind National Reinsurance and Puregold Price Club 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.