Correlation Between H FARM and National Bank
Can any of the company-specific risk be diversified away by investing in both H FARM 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 H FARM and National Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between H FARM SPA and National Bank Holdings, you can compare the effects of market volatilities on H FARM 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 H FARM with a short position of National Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of H FARM and National Bank.
Diversification Opportunities for H FARM and National Bank
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between 5JQ and National is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding H FARM SPA and National Bank Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Bank Holdings and H FARM 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 H FARM SPA 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 Holdings has no effect on the direction of H FARM i.e., H FARM and National Bank go up and down completely randomly.
Pair Corralation between H FARM and National Bank
Assuming the 90 days horizon H FARM is expected to generate 3.59 times less return on investment than National Bank. In addition to that, H FARM is 2.15 times more volatile than National Bank Holdings. It trades about 0.0 of its total potential returns per unit of risk. National Bank Holdings is currently generating about 0.02 per unit of volatility. If you would invest 4,149 in National Bank Holdings on August 24, 2024 and sell it today you would earn a total of 211.00 from holding National Bank Holdings or generate 5.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
H FARM SPA vs. National Bank Holdings
Performance |
| Timeline |
| H FARM SPA |
| National Bank Holdings |
H FARM and National Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with H FARM and National Bank
The main advantage of trading using opposite H FARM and National Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if H FARM 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.| H FARM vs. The Bank of | H FARM vs. Ares Management Corp | H FARM vs. Superior Plus Corp | H FARM vs. NMI Holdings |
| National Bank vs. Regions Financial | National Bank vs. Superior Plus Corp | National Bank vs. NMI Holdings | National Bank vs. Origin Agritech |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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