Correlation Between National Bank and Tatton Asset
Can any of the company-specific risk be diversified away by investing in both National Bank and Tatton Asset 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 Tatton Asset 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 Tatton Asset Management, you can compare the effects of market volatilities on National Bank and Tatton Asset 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 Tatton Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Bank and Tatton Asset.
Diversification Opportunities for National Bank and Tatton Asset
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between National and Tatton is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding National Bank of and Tatton Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tatton Asset Management 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 Tatton Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tatton Asset Management has no effect on the direction of National Bank i.e., National Bank and Tatton Asset go up and down completely randomly.
Pair Corralation between National Bank and Tatton Asset
Assuming the 90 days trading horizon National Bank is expected to generate 1.11 times less return on investment than Tatton Asset. But when comparing it to its historical volatility, National Bank of is 1.27 times less risky than Tatton Asset. It trades about 0.09 of its potential returns per unit of risk. Tatton Asset Management is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 59,276 in Tatton Asset Management on September 3, 2024 and sell it today you would earn a total of 9,724 from holding Tatton Asset Management or generate 16.4% 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. Tatton Asset Management
Performance |
| Timeline |
| National Bank |
| Tatton Asset Management |
National Bank and Tatton Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Bank and Tatton Asset
The main advantage of trading using opposite National Bank and Tatton Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Bank position performs unexpectedly, Tatton Asset 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 Tatton Asset will offset losses from the drop in Tatton Asset'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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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