Correlation Between Nyrstar NV and Retail Estates

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

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

Diversification Opportunities for Nyrstar NV and Retail Estates

-0.47

Correlation Coefficient

Nyrstar NV  Retail Estates

Very good diversification

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

Pair Corralation between Nyrstar NV and Retail Estates

Assuming the 90 days trading horizon Nyrstar NV is expected to under-perform the Retail Estates. In addition to that, Nyrstar NV is 4.78 times more volatile than Retail Estates . It trades about -0.06 of its total potential returns per unit of risk. Retail Estates is currently generating about 0.01 per unit of volatility. If you would invest  5,900  in Retail Estates on December 27, 2024 and sell it today you would earn a total of  30.00  from holding Retail Estates or generate 0.51% return on investment over 90 days.

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

Nyrstar NV  vs.  Retail Estates

Nyrstar NV

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nyrstar NV has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Retail Estates

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Retail Estates are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Retail Estates is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Nyrstar NV and Retail Estates

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

The idea behind Nyrstar NV and Retail Estates 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.