Correlation Between NAT ABSOLUTE and Vintcom Technology

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

By analyzing existing cross correlation between NAT ABSOLUTE TECHNOLOGIES and Vintcom Technology PCL, you can compare the effects of market volatilities on NAT ABSOLUTE and Vintcom Technology 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 NAT ABSOLUTE with a short position of Vintcom Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of NAT ABSOLUTE and Vintcom Technology.

Diversification Opportunities for NAT ABSOLUTE and Vintcom Technology

0.95

Correlation Coefficient

NAT ABSOLUTE  Vintcom Technology

Almost no diversification

The 3 months correlation between NAT and Vintcom is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding NAT ABSOLUTE TECHNOLOGIES and Vintcom Technology PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vintcom Technology PCL and NAT ABSOLUTE 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 NAT ABSOLUTE TECHNOLOGIES are associated (or correlated) with Vintcom Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vintcom Technology PCL has no effect on the direction of NAT ABSOLUTE i.e., NAT ABSOLUTE and Vintcom Technology go up and down completely randomly.

Pair Corralation between NAT ABSOLUTE and Vintcom Technology

Assuming the 90 days trading horizon NAT ABSOLUTE TECHNOLOGIES is expected to generate 1.9 times more return on investment than Vintcom Technology. However, NAT ABSOLUTE is 1.9 times more volatile than Vintcom Technology PCL. It trades about -0.17 of its potential returns per unit of risk. Vintcom Technology PCL is currently generating about -0.41 per unit of risk. If you would invest  462.00  in NAT ABSOLUTE TECHNOLOGIES on October 6, 2024 and sell it today you would lose (18.00) from holding NAT ABSOLUTE TECHNOLOGIES or give up 3.9% of portfolio value over 90 days.

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

NAT ABSOLUTE TECHNOLOGIES  vs.  Vintcom Technology PCL

NAT ABSOLUTE TECHNOLOGIES

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NAT ABSOLUTE TECHNOLOGIES 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 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.

Vintcom Technology PCL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vintcom Technology PCL 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 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.

Pair Trading with NAT ABSOLUTE and Vintcom Technology

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

The idea behind NAT ABSOLUTE TECHNOLOGIES and Vintcom Technology PCL 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 Transaction History module to view history of all your transactions and understand their impact on performance.