Correlation Between INET Leasehold and Nfc PLC

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

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

Diversification Opportunities for INET Leasehold and Nfc PLC

-0.42

Correlation Coefficient

INET Leasehold  Nfc PLC

Very good diversification

The 3 months correlation between INET and Nfc is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding INET Leasehold REIT and Nfc PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nfc PLC and INET Leasehold 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 INET Leasehold REIT are associated (or correlated) with Nfc PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nfc PLC has no effect on the direction of INET Leasehold i.e., INET Leasehold and Nfc PLC go up and down completely randomly.

Pair Corralation between INET Leasehold and Nfc PLC

Assuming the 90 days trading horizon INET Leasehold REIT is expected to generate 0.21 times more return on investment than Nfc PLC. However, INET Leasehold REIT is 4.8 times less risky than Nfc PLC. It trades about 0.17 of its potential returns per unit of risk. Nfc PLC is currently generating about -0.06 per unit of risk. If you would invest  855.00  in INET Leasehold REIT on April 24, 2025 and sell it today you would earn a total of  80.00  from holding INET Leasehold REIT or generate 9.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.31%
Values	Daily Returns

INET Leasehold REIT  vs.  Nfc PLC

INET Leasehold REIT

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in INET Leasehold REIT are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly conflicting basic indicators, INET Leasehold may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Nfc PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nfc PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental indicators remain quite persistent which may send shares a bit higher in August 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with INET Leasehold and Nfc PLC

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

The idea behind INET Leasehold REIT and Nfc PLC 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.