Correlation Between NATIONAL INVESTMENT and CIM FINANCIAL

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

Diversification Opportunities for NATIONAL INVESTMENT and CIM FINANCIAL

-0.47

Correlation Coefficient

NATIONAL INVESTMENT  CIM FINANCIAL

Very good diversification

The 3 months correlation between NATIONAL and CIM is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding NATIONAL INVESTMENT TRUST and CIM FINANCIAL SERVICES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIM FINANCIAL SERVICES 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 CIM FINANCIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIM FINANCIAL SERVICES has no effect on the direction of NATIONAL INVESTMENT i.e., NATIONAL INVESTMENT and CIM FINANCIAL go up and down completely randomly.

Pair Corralation between NATIONAL INVESTMENT and CIM FINANCIAL

Assuming the 90 days trading horizon NATIONAL INVESTMENT TRUST is expected to under-perform the CIM FINANCIAL. In addition to that, NATIONAL INVESTMENT is 2.61 times more volatile than CIM FINANCIAL SERVICES. It trades about -0.07 of its total potential returns per unit of risk. CIM FINANCIAL SERVICES is currently generating about 0.05 per unit of volatility. If you would invest  1,150  in CIM FINANCIAL SERVICES on October 23, 2024 and sell it today you would earn a total of  275.00  from holding CIM FINANCIAL SERVICES or generate 23.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

NATIONAL INVESTMENT TRUST  vs.  CIM FINANCIAL SERVICES

NATIONAL INVESTMENT TRUST

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NATIONAL INVESTMENT TRUST has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

CIM FINANCIAL SERVICES

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CIM FINANCIAL SERVICES are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady primary indicators, CIM FINANCIAL may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with NATIONAL INVESTMENT and CIM FINANCIAL

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

The idea behind NATIONAL INVESTMENT TRUST and CIM FINANCIAL SERVICES 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.