Correlation Between More Return and NCL International

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

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

Diversification Opportunities for More Return and NCL International

0.54

Correlation Coefficient

More Return  NCL International

Very weak diversification

The 3 months correlation between More and NCL is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding More Return Public and NCL International Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NCL International and More Return 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 More Return 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 More Return i.e., More Return and NCL International go up and down completely randomly.

Pair Corralation between More Return and NCL International

Assuming the 90 days trading horizon More Return Public is expected to under-perform the NCL International. In addition to that, More Return is 3.65 times more volatile than NCL International Logistics. It trades about -0.22 of its total potential returns per unit of risk. NCL International Logistics is currently generating about -0.28 per unit of volatility. If you would invest  51.00  in NCL International Logistics on October 5, 2024 and sell it today you would lose (11.00) from holding NCL International Logistics or give up 21.57% of portfolio value over 90 days.

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

More Return Public  vs.  NCL International Logistics

More Return Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days More Return Public 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 forward-looking signals remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

NCL International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NCL International Logistics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's essential indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with More Return and NCL International

The main advantage of trading using opposite More Return and NCL International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if More Return 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 More Return 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.

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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.