Correlation Between NATIONAL INVESTMENT and TELEKOM NETWORK

Can any of the company-specific risk be diversified away by investing in both NATIONAL INVESTMENT and TELEKOM NETWORK 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 TELEKOM NETWORK 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 TELEKOM NETWORK MALAWI, you can compare the effects of market volatilities on NATIONAL INVESTMENT and TELEKOM NETWORK 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 TELEKOM NETWORK. Check out your portfolio center. Please also check ongoing floating volatility patterns of NATIONAL INVESTMENT and TELEKOM NETWORK.

Diversification Opportunities for NATIONAL INVESTMENT and TELEKOM NETWORK

0.55

Correlation Coefficient

NATIONAL INVESTMENT  TELEKOM NETWORK

Very weak diversification

The 3 months correlation between NATIONAL and TELEKOM is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding NATIONAL INVESTMENT TRUST and TELEKOM NETWORK MALAWI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TELEKOM NETWORK MALAWI 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 TELEKOM NETWORK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TELEKOM NETWORK MALAWI has no effect on the direction of NATIONAL INVESTMENT i.e., NATIONAL INVESTMENT and TELEKOM NETWORK go up and down completely randomly.

Pair Corralation between NATIONAL INVESTMENT and TELEKOM NETWORK

Assuming the 90 days trading horizon NATIONAL INVESTMENT TRUST is expected to generate 0.59 times more return on investment than TELEKOM NETWORK. However, NATIONAL INVESTMENT TRUST is 1.69 times less risky than TELEKOM NETWORK. It trades about 0.22 of its potential returns per unit of risk. TELEKOM NETWORK MALAWI is currently generating about 0.02 per unit of risk. If you would invest  44,000  in NATIONAL INVESTMENT TRUST on December 23, 2024 and sell it today you would earn a total of  19,409  from holding NATIONAL INVESTMENT TRUST or generate 44.11% return on investment over 90 days.

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

NATIONAL INVESTMENT TRUST  vs.  TELEKOM NETWORK MALAWI

NATIONAL INVESTMENT TRUST

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in NATIONAL INVESTMENT TRUST are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, NATIONAL INVESTMENT unveiled solid returns over the last few months and may actually be approaching a breakup point.

TELEKOM NETWORK MALAWI

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TELEKOM NETWORK MALAWI are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, TELEKOM NETWORK is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with NATIONAL INVESTMENT and TELEKOM NETWORK

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

The idea behind NATIONAL INVESTMENT TRUST and TELEKOM NETWORK MALAWI 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.