Correlation Between PLASTIC INDUSTRY and NATIONAL INVESTMENT

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

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

Diversification Opportunities for PLASTIC INDUSTRY and NATIONAL INVESTMENT

-0.29

Correlation Coefficient

PLASTIC INDUSTRY  NATIONAL INVESTMENT

Very good diversification

The 3 months correlation between PLASTIC and NATIONAL is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding PLASTIC INDUSTRY LTD and NATIONAL INVESTMENT TRUST in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NATIONAL INVESTMENT TRUST and PLASTIC INDUSTRY 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 PLASTIC INDUSTRY LTD are associated (or correlated) with NATIONAL INVESTMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NATIONAL INVESTMENT TRUST has no effect on the direction of PLASTIC INDUSTRY i.e., PLASTIC INDUSTRY and NATIONAL INVESTMENT go up and down completely randomly.

Pair Corralation between PLASTIC INDUSTRY and NATIONAL INVESTMENT

Assuming the 90 days trading horizon PLASTIC INDUSTRY LTD is expected to generate 0.26 times more return on investment than NATIONAL INVESTMENT. However, PLASTIC INDUSTRY LTD is 3.84 times less risky than NATIONAL INVESTMENT. It trades about 0.15 of its potential returns per unit of risk. NATIONAL INVESTMENT TRUST is currently generating about 0.01 per unit of risk. If you would invest  4,350  in PLASTIC INDUSTRY LTD on December 24, 2024 and sell it today you would earn a total of  300.00  from holding PLASTIC INDUSTRY LTD or generate 6.9% return on investment over 90 days.

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

PLASTIC INDUSTRY LTD  vs.  NATIONAL INVESTMENT TRUST

PLASTIC INDUSTRY LTD

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PLASTIC INDUSTRY LTD are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady primary indicators, PLASTIC INDUSTRY may actually be approaching a critical reversion point that can send shares even higher in April 2025.

NATIONAL INVESTMENT TRUST

Risk-Adjusted Performance

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 rather sound technical and fundamental indicators, NATIONAL INVESTMENT is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with PLASTIC INDUSTRY and NATIONAL INVESTMENT

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

The idea behind PLASTIC INDUSTRY LTD and NATIONAL INVESTMENT TRUST 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.