Correlation Between NCAB and Corem Property

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

By analyzing existing cross correlation between NCAB Group and Corem Property Group, you can compare the effects of market volatilities on NCAB and Corem Property 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 NCAB with a short position of Corem Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of NCAB and Corem Property.

Diversification Opportunities for NCAB and Corem Property

0.6

Correlation Coefficient

NCAB  Corem Property

Poor diversification

The 3 months correlation between NCAB and Corem is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding NCAB Group and Corem Property Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corem Property Group and NCAB 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 NCAB Group are associated (or correlated) with Corem Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corem Property Group has no effect on the direction of NCAB i.e., NCAB and Corem Property go up and down completely randomly.

Pair Corralation between NCAB and Corem Property

Assuming the 90 days trading horizon NCAB Group is expected to generate 0.97 times more return on investment than Corem Property. However, NCAB Group is 1.03 times less risky than Corem Property. It trades about -0.14 of its potential returns per unit of risk. Corem Property Group is currently generating about -0.18 per unit of risk. If you would invest  7,490  in NCAB Group on August 31, 2024 and sell it today you would lose (1,720) from holding NCAB Group or give up 22.96% of portfolio value over 90 days.

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

NCAB Group  vs.  Corem Property Group

NCAB Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NCAB Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Corem Property Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Corem Property Group 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 December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with NCAB and Corem Property

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

The idea behind NCAB Group and Corem Property Group 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.