Correlation Between SEEK and National Retail

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

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

Diversification Opportunities for SEEK and National Retail

-0.28

Correlation Coefficient

SEEK  National Retail

Very good diversification

The 3 months correlation between SEEK and National is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding SEEK Limited and National Retail Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Retail Prop and SEEK 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 SEEK Limited are associated (or correlated) with National Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Retail Prop has no effect on the direction of SEEK i.e., SEEK and National Retail go up and down completely randomly.

Pair Corralation between SEEK and National Retail

Assuming the 90 days horizon SEEK Limited is expected to generate 1.31 times more return on investment than National Retail. However, SEEK is 1.31 times more volatile than National Retail Properties. It trades about 0.1 of its potential returns per unit of risk. National Retail Properties is currently generating about -0.03 per unit of risk. If you would invest  1,230  in SEEK Limited on May 11, 2025 and sell it today you would earn a total of  120.00  from holding SEEK Limited or generate 9.76% return on investment over 90 days.

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

SEEK Limited  vs.  National Retail Properties

SEEK Limited

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in SEEK Limited are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, SEEK may actually be approaching a critical reversion point that can send shares even higher in September 2025.

National Retail Prop

Risk-Adjusted Performance

Weakest

Over the last 90 days National Retail Properties has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, National Retail is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with SEEK and National Retail

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

The idea behind SEEK Limited and National Retail Properties 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.