Correlation Between Nagacorp and Table Trac

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

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

Diversification Opportunities for Nagacorp and Table Trac

-0.05

Correlation Coefficient

Nagacorp  Table Trac

Good diversification

The 3 months correlation between Nagacorp and Table is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Nagacorp and Table Trac in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Table Trac and Nagacorp 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 Nagacorp are associated (or correlated) with Table Trac. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Table Trac has no effect on the direction of Nagacorp i.e., Nagacorp and Table Trac go up and down completely randomly.

Pair Corralation between Nagacorp and Table Trac

Assuming the 90 days horizon Nagacorp is expected to generate 0.96 times more return on investment than Table Trac. However, Nagacorp is 1.04 times less risky than Table Trac. It trades about 0.19 of its potential returns per unit of risk. Table Trac is currently generating about 0.07 per unit of risk. If you would invest  33.00  in Nagacorp on December 29, 2024 and sell it today you would earn a total of  12.00  from holding Nagacorp or generate 36.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Nagacorp  vs.  Table Trac

Nagacorp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nagacorp are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Nagacorp reported solid returns over the last few months and may actually be approaching a breakup point.

Table Trac

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Table Trac are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Table Trac exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nagacorp and Table Trac

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

The idea behind Nagacorp and Table Trac 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.