Correlation Between Cembra Money and National Bank
Can any of the company-specific risk be diversified away by investing in both Cembra Money and National Bank 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 Cembra Money and National Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cembra Money Bank and National Bank of, you can compare the effects of market volatilities on Cembra Money and National Bank 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 Cembra Money with a short position of National Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cembra Money and National Bank.
Diversification Opportunities for Cembra Money and National Bank
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Cembra and National is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Cembra Money Bank and National Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Bank and Cembra Money 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 Cembra Money Bank are associated (or correlated) with National Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Bank has no effect on the direction of Cembra Money i.e., Cembra Money and National Bank go up and down completely randomly.
Pair Corralation between Cembra Money and National Bank
Assuming the 90 days trading horizon Cembra Money is expected to generate 4.36 times less return on investment than National Bank. But when comparing it to its historical volatility, Cembra Money Bank is 9.05 times less risky than National Bank. It trades about 0.07 of its potential returns per unit of risk. National Bank of is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 241.00 in National Bank of on November 27, 2024 and sell it today you would earn a total of 37.00 from holding National Bank of or generate 15.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Cembra Money Bank vs. National Bank of
Performance |
| Timeline |
| Cembra Money Bank |
| National Bank |
Cembra Money and National Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cembra Money and National Bank
The main advantage of trading using opposite Cembra Money and National Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cembra Money position performs unexpectedly, National Bank 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 Bank will offset losses from the drop in National Bank's long position.| Cembra Money vs. TT Electronics Plc | Cembra Money vs. Blackrock World Mining | Cembra Money vs. Coeur Mining | Cembra Money vs. Hochschild Mining plc |
| National Bank vs. Geely Automobile Holdings | National Bank vs. Infrastrutture Wireless Italiane | National Bank vs. AcadeMedia AB | National Bank vs. Gruppo MutuiOnline SpA |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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