Correlation Between Table Trac and Nagacorp

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

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

Diversification Opportunities for Table Trac and Nagacorp

-0.05

Correlation Coefficient

Table Trac  Nagacorp

Good diversification

The 3 months correlation between Table and Nagacorp is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Table Trac and Nagacorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nagacorp and Table Trac 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 Table Trac are associated (or correlated) with Nagacorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nagacorp has no effect on the direction of Table Trac i.e., Table Trac and Nagacorp go up and down completely randomly.

Pair Corralation between Table Trac and Nagacorp

Given the investment horizon of 90 days Table Trac is expected to generate 2.74 times less return on investment than Nagacorp. In addition to that, Table Trac is 1.04 times more volatile than Nagacorp. It trades about 0.07 of its total potential returns per unit of risk. Nagacorp is currently generating about 0.19 per unit of volatility. If you would invest  33.00  in Nagacorp on December 28, 2024 and sell it today you would earn a total of  12.00  from holding Nagacorp or generate 36.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Table Trac  vs.  Nagacorp

Table Trac

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Table Trac are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Table Trac exhibited solid returns over the last few months and may actually be approaching a breakup point.

Nagacorp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nagacorp are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Nagacorp reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Table Trac and Nagacorp

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

The idea behind Table Trac and Nagacorp 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.

Check out your portfolio center.

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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.