Correlation Between WIMFARM SA and National Bank
Can any of the company-specific risk be diversified away by investing in both WIMFARM SA 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 WIMFARM SA and National Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WIMFARM SA EO and National Bank Holdings, you can compare the effects of market volatilities on WIMFARM SA 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 WIMFARM SA with a short position of National Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of WIMFARM SA and National Bank.
Diversification Opportunities for WIMFARM SA and National Bank
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between WIMFARM and National is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding WIMFARM SA EO 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 WIMFARM SA 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 WIMFARM SA EO 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 WIMFARM SA i.e., WIMFARM SA and National Bank go up and down completely randomly.
Pair Corralation between WIMFARM SA and National Bank
Assuming the 90 days horizon WIMFARM SA is expected to generate 1.97 times less return on investment than National Bank. In addition to that, WIMFARM SA is 1.81 times more volatile than National Bank Holdings. It trades about 0.03 of its total potential returns per unit of risk. National Bank Holdings is currently generating about 0.12 per unit of volatility. If you would invest 3,732 in National Bank Holdings on August 28, 2024 and sell it today you would earn a total of 748.00 from holding National Bank Holdings or generate 20.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WIMFARM SA EO vs. National Bank Holdings
Performance |
| Timeline |
| WIMFARM SA EO |
| National Bank Holdings |
WIMFARM SA and National Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WIMFARM SA and National Bank
The main advantage of trading using opposite WIMFARM SA and National Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WIMFARM SA 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.| WIMFARM SA vs. Superior Plus Corp | WIMFARM SA vs. NMI Holdings | WIMFARM SA vs. Origin Agritech | WIMFARM SA vs. SIVERS SEMICONDUCTORS AB |
| National Bank vs. Superior Plus Corp | National Bank vs. NMI Holdings | National Bank vs. Origin Agritech | National Bank vs. SIVERS SEMICONDUCTORS AB |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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