Correlation Between NAU IB and Gs Retail

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

By analyzing existing cross correlation between NAU IB Capital and Gs Retail, you can compare the effects of market volatilities on NAU IB and Gs Retail 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 NAU IB with a short position of Gs Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of NAU IB and Gs Retail.

Diversification Opportunities for NAU IB and Gs Retail

-0.29

Correlation Coefficient

NAU IB  Gs Retail

Very good diversification

The 3 months correlation between NAU and 007070 is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding NAU IB Capital and Gs Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gs Retail and NAU IB 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 NAU IB Capital are associated (or correlated) with Gs Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gs Retail has no effect on the direction of NAU IB i.e., NAU IB and Gs Retail go up and down completely randomly.

Pair Corralation between NAU IB and Gs Retail

Assuming the 90 days trading horizon NAU IB Capital is expected to generate 1.37 times more return on investment than Gs Retail. However, NAU IB is 1.37 times more volatile than Gs Retail. It trades about 0.11 of its potential returns per unit of risk. Gs Retail is currently generating about -0.12 per unit of risk. If you would invest  96,490  in NAU IB Capital on October 7, 2024 and sell it today you would earn a total of  38,510  from holding NAU IB Capital or generate 39.91% return on investment over 90 days.

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

NAU IB Capital  vs.  Gs Retail

NAU IB Capital

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in NAU IB Capital are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, NAU IB sustained solid returns over the last few months and may actually be approaching a breakup point.

Gs Retail

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gs Retail has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with NAU IB and Gs Retail

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

The idea behind NAU IB Capital and Gs Retail 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.