Correlation Between NCL International and More Return

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

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

Diversification Opportunities for NCL International and More Return

0.54

Correlation Coefficient

NCL International  More Return

Very weak diversification

The 3 months correlation between NCL and More is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding NCL International Logistics and More Return Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on More Return Public and NCL 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 NCL International Logistics are associated (or correlated) with More Return. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of More Return Public has no effect on the direction of NCL International i.e., NCL International and More Return go up and down completely randomly.

Pair Corralation between NCL International and More Return

Assuming the 90 days trading horizon NCL International is expected to generate 1.07 times less return on investment than More Return. But when comparing it to its historical volatility, NCL International Logistics is 1.01 times less risky than More Return. It trades about 0.04 of its potential returns per unit of risk. More Return Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  38.00  in More Return Public on October 5, 2024 and sell it today you would lose (36.00) from holding More Return Public or give up 94.74% of portfolio value over 90 days.

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

NCL International Logistics  vs.  More Return Public

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.

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.

Pair Trading with NCL International and More Return

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

The idea behind NCL International Logistics and More Return Public 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.