Correlation Between NATIONAL INVESTMENT and SUNBIRD HOTELS

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

By analyzing existing cross correlation between NATIONAL INVESTMENT TRUST and SUNBIRD HOTELS TOURISM, you can compare the effects of market volatilities on NATIONAL INVESTMENT and SUNBIRD HOTELS 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 NATIONAL INVESTMENT with a short position of SUNBIRD HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of NATIONAL INVESTMENT and SUNBIRD HOTELS.

Diversification Opportunities for NATIONAL INVESTMENT and SUNBIRD HOTELS

0.24

Correlation Coefficient

NATIONAL INVESTMENT  SUNBIRD HOTELS

Modest diversification

The 3 months correlation between NATIONAL and SUNBIRD is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding NATIONAL INVESTMENT TRUST and SUNBIRD HOTELS TOURISM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SUNBIRD HOTELS TOURISM and NATIONAL INVESTMENT 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 NATIONAL INVESTMENT TRUST are associated (or correlated) with SUNBIRD HOTELS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SUNBIRD HOTELS TOURISM has no effect on the direction of NATIONAL INVESTMENT i.e., NATIONAL INVESTMENT and SUNBIRD HOTELS go up and down completely randomly.

Pair Corralation between NATIONAL INVESTMENT and SUNBIRD HOTELS

Assuming the 90 days trading horizon NATIONAL INVESTMENT TRUST is expected to generate 1.11 times more return on investment than SUNBIRD HOTELS. However, NATIONAL INVESTMENT is 1.11 times more volatile than SUNBIRD HOTELS TOURISM. It trades about 0.12 of its potential returns per unit of risk. SUNBIRD HOTELS TOURISM is currently generating about 0.13 per unit of risk. If you would invest  41,116  in NATIONAL INVESTMENT TRUST on September 12, 2024 and sell it today you would earn a total of  2,884  from holding NATIONAL INVESTMENT TRUST or generate 7.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

NATIONAL INVESTMENT TRUST  vs.  SUNBIRD HOTELS TOURISM

NATIONAL INVESTMENT TRUST

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in NATIONAL INVESTMENT TRUST are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, NATIONAL INVESTMENT may actually be approaching a critical reversion point that can send shares even higher in January 2025.

SUNBIRD HOTELS TOURISM

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SUNBIRD HOTELS TOURISM are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak forward indicators, SUNBIRD HOTELS may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with NATIONAL INVESTMENT and SUNBIRD HOTELS

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

The idea behind NATIONAL INVESTMENT TRUST and SUNBIRD HOTELS TOURISM 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 Commodity Directory module to find actively traded commodities issued by global exchanges.