Correlation Between Certara and National Research

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

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

Diversification Opportunities for Certara and National Research

-0.51

Correlation Coefficient

Certara  National Research

Excellent diversification

The 3 months correlation between Certara and National is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Certara and National Research Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Research Corp and Certara 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 Certara are associated (or correlated) with National Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Research Corp has no effect on the direction of Certara i.e., Certara and National Research go up and down completely randomly.

Pair Corralation between Certara and National Research

Given the investment horizon of 90 days Certara is expected to generate 2.91 times less return on investment than National Research. In addition to that, Certara is 1.31 times more volatile than National Research Corp. It trades about 0.03 of its total potential returns per unit of risk. National Research Corp is currently generating about 0.11 per unit of volatility. If you would invest  1,360  in National Research Corp on March 25, 2025 and sell it today you would earn a total of  295.00  from holding National Research Corp or generate 21.69% return on investment over 90 days.

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

Certara  vs.  National Research Corp

Certara

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Certara are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Certara may actually be approaching a critical reversion point that can send shares even higher in July 2025.

National Research Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in National Research Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, National Research exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Certara and National Research

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

The idea behind Certara and National Research Corp 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.