Correlation Between National Bank and European Metals
Can any of the company-specific risk be diversified away by investing in both National Bank and European Metals 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 National Bank and European Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Bank of and European Metals Holdings, you can compare the effects of market volatilities on National Bank and European Metals 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 National Bank with a short position of European Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Bank and European Metals.
Diversification Opportunities for National Bank and European Metals
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between National and European is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding National Bank of and European Metals Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on European Metals Holdings and National Bank 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 National Bank of are associated (or correlated) with European Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of European Metals Holdings has no effect on the direction of National Bank i.e., National Bank and European Metals go up and down completely randomly.
Pair Corralation between National Bank and European Metals
Assuming the 90 days trading horizon National Bank of is expected to generate 0.4 times more return on investment than European Metals. However, National Bank of is 2.52 times less risky than European Metals. It trades about 0.09 of its potential returns per unit of risk. European Metals Holdings is currently generating about -0.17 per unit of risk. If you would invest 241.00 in National Bank of on September 13, 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 | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Bank of vs. European Metals Holdings
Performance |
| Timeline |
| National Bank |
| European Metals Holdings |
National Bank and European Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Bank and European Metals
The main advantage of trading using opposite National Bank and European Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Bank position performs unexpectedly, European Metals 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 European Metals will offset losses from the drop in European Metals' long position.| National Bank vs. Samsung Electronics Co | National Bank vs. Samsung Electronics Co | National Bank vs. Hyundai Motor | National Bank vs. Reliance Industries Ltd |
| European Metals vs. Givaudan SA | European Metals vs. Antofagasta PLC | European Metals vs. Ferrexpo PLC | European Metals vs. Atalaya Mining |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |