Correlation Between National Silicon and Marssenger Kitchenware

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Can any of the company-specific risk be diversified away by investing in both National Silicon and Marssenger Kitchenware 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 Silicon and Marssenger Kitchenware into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Silicon Industry and Marssenger Kitchenware Co, you can compare the effects of market volatilities on National Silicon and Marssenger Kitchenware 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 Silicon with a short position of Marssenger Kitchenware. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Silicon and Marssenger Kitchenware.

Diversification Opportunities for National Silicon and Marssenger Kitchenware

0.36
  Correlation Coefficient

Weak diversification

The 3 months correlation between National and Marssenger is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding National Silicon Industry and Marssenger Kitchenware Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marssenger Kitchenware and National Silicon 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 Silicon Industry are associated (or correlated) with Marssenger Kitchenware. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marssenger Kitchenware has no effect on the direction of National Silicon i.e., National Silicon and Marssenger Kitchenware go up and down completely randomly.

Pair Corralation between National Silicon and Marssenger Kitchenware

Assuming the 90 days trading horizon National Silicon Industry is expected to generate 0.85 times more return on investment than Marssenger Kitchenware. However, National Silicon Industry is 1.18 times less risky than Marssenger Kitchenware. It trades about 0.01 of its potential returns per unit of risk. Marssenger Kitchenware Co is currently generating about -0.04 per unit of risk. If you would invest  1,828  in National Silicon Industry on October 5, 2024 and sell it today you would earn a total of  13.00  from holding National Silicon Industry or generate 0.71% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

National Silicon Industry  vs.  Marssenger Kitchenware Co

 Performance 
       Timeline  
National Silicon Industry 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days National Silicon Industry 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.
Marssenger Kitchenware 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Marssenger Kitchenware Co 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.

National Silicon and Marssenger Kitchenware Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with National Silicon and Marssenger Kitchenware

The main advantage of trading using opposite National Silicon and Marssenger Kitchenware positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Silicon position performs unexpectedly, Marssenger Kitchenware 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 Marssenger Kitchenware will offset losses from the drop in Marssenger Kitchenware's long position.
The idea behind National Silicon Industry and Marssenger Kitchenware Co 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..

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