Correlation Between ELITE MEAT and NATIONAL INVESTMENT

Can any of the company-specific risk be diversified away by investing in both ELITE MEAT and NATIONAL INVESTMENT 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 ELITE MEAT and NATIONAL INVESTMENT into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ELITE MEAT PROCESSORS and NATIONAL INVESTMENT TRUST, you can compare the effects of market volatilities on ELITE MEAT and NATIONAL INVESTMENT 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 ELITE MEAT with a short position of NATIONAL INVESTMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of ELITE MEAT and NATIONAL INVESTMENT.

Diversification Opportunities for ELITE MEAT and NATIONAL INVESTMENT

-0.16

Correlation Coefficient

ELITE MEAT  NATIONAL INVESTMENT

Good diversification

The 3 months correlation between ELITE and NATIONAL is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding ELITE MEAT PROCESSORS and NATIONAL INVESTMENT TRUST in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NATIONAL INVESTMENT TRUST and ELITE MEAT 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 ELITE MEAT PROCESSORS are associated (or correlated) with NATIONAL INVESTMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NATIONAL INVESTMENT TRUST has no effect on the direction of ELITE MEAT i.e., ELITE MEAT and NATIONAL INVESTMENT go up and down completely randomly.

Pair Corralation between ELITE MEAT and NATIONAL INVESTMENT

Assuming the 90 days trading horizon ELITE MEAT PROCESSORS is expected to generate 0.27 times more return on investment than NATIONAL INVESTMENT. However, ELITE MEAT PROCESSORS is 3.64 times less risky than NATIONAL INVESTMENT. It trades about 0.18 of its potential returns per unit of risk. NATIONAL INVESTMENT TRUST is currently generating about -0.07 per unit of risk. If you would invest  185.00  in ELITE MEAT PROCESSORS on October 23, 2024 and sell it today you would earn a total of  8.00  from holding ELITE MEAT PROCESSORS or generate 4.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	6.57%
Values	Daily Returns

ELITE MEAT PROCESSORS  vs.  NATIONAL INVESTMENT TRUST

ELITE MEAT PROCESSORS

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ELITE MEAT PROCESSORS are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, ELITE MEAT may actually be approaching a critical reversion point that can send shares even higher in February 2025.

NATIONAL INVESTMENT TRUST

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NATIONAL INVESTMENT TRUST has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with ELITE MEAT and NATIONAL INVESTMENT

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

The idea behind ELITE MEAT PROCESSORS and NATIONAL INVESTMENT TRUST 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.