Correlation Between Masterkool International and NCL International

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

By analyzing existing cross correlation between Masterkool International Public and NCL International Logistics, you can compare the effects of market volatilities on Masterkool International and NCL International 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 Masterkool International with a short position of NCL International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Masterkool International and NCL International.

Diversification Opportunities for Masterkool International and NCL International

0.83

Correlation Coefficient

Masterkool International  NCL International

Very poor diversification

The 3 months correlation between Masterkool and NCL is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Masterkool International Publi and NCL International Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NCL International and Masterkool International 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 Masterkool International Public are associated (or correlated) with NCL International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NCL International has no effect on the direction of Masterkool International i.e., Masterkool International and NCL International go up and down completely randomly.

Pair Corralation between Masterkool International and NCL International

Assuming the 90 days trading horizon Masterkool International Public is expected to generate 0.99 times more return on investment than NCL International. However, Masterkool International Public is 1.01 times less risky than NCL International. It trades about 0.04 of its potential returns per unit of risk. NCL International Logistics is currently generating about 0.04 per unit of risk. If you would invest  47.00  in Masterkool International Public on September 5, 2024 and sell it today you would lose (13.00) from holding Masterkool International Public or give up 27.66% of portfolio value over 90 days.

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

Masterkool International Publi  vs.  NCL International Logistics

Masterkool International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Masterkool International Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Masterkool International is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

NCL International

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in NCL International Logistics are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting essential indicators, NCL International disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Masterkool International and NCL International

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

The idea behind Masterkool International Public and NCL International Logistics 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.

Check out your portfolio center.

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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.