Correlation Between National Bank and Lendinvest PLC
Can any of the company-specific risk be diversified away by investing in both National Bank and Lendinvest 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 National Bank and Lendinvest PLC 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 Lendinvest PLC, you can compare the effects of market volatilities on National Bank and Lendinvest 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 National Bank with a short position of Lendinvest PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Bank and Lendinvest PLC.
Diversification Opportunities for National Bank and Lendinvest PLC
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between National and Lendinvest is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding National Bank of and Lendinvest PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendinvest PLC 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 Lendinvest PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lendinvest PLC has no effect on the direction of National Bank i.e., National Bank and Lendinvest PLC go up and down completely randomly.
Pair Corralation between National Bank and Lendinvest PLC
Assuming the 90 days trading horizon National Bank of is expected to generate 1.08 times more return on investment than Lendinvest PLC. However, National Bank is 1.08 times more volatile than Lendinvest PLC. It trades about 0.09 of its potential returns per unit of risk. Lendinvest PLC is currently generating about -0.05 per unit of risk. If you would invest 241.00 in National Bank of on September 3, 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. Lendinvest PLC
Performance |
| Timeline |
| National Bank |
| Lendinvest PLC |
National Bank and Lendinvest PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Bank and Lendinvest PLC
The main advantage of trading using opposite National Bank and Lendinvest PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Bank position performs unexpectedly, Lendinvest 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 Lendinvest PLC will offset losses from the drop in Lendinvest PLC's long position.| National Bank vs. Qurate Retail Series | National Bank vs. GreenX Metals | National Bank vs. CNH Industrial NV | National Bank vs. Wheaton Precious Metals |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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