Correlation Between Apple and National Bank
Can any of the company-specific risk be diversified away by investing in both Apple 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 Apple and National Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc CDR and National Bank of, you can compare the effects of market volatilities on Apple 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 Apple with a short position of National Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and National Bank.
Diversification Opportunities for Apple and National Bank
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Apple and National is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc CDR and National Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Bank and Apple 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 Apple Inc CDR 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 has no effect on the direction of Apple i.e., Apple and National Bank go up and down completely randomly.
Pair Corralation between Apple and National Bank
Assuming the 90 days trading horizon Apple Inc CDR is expected to generate 1.27 times more return on investment than National Bank. However, Apple is 1.27 times more volatile than National Bank of. It trades about 0.1 of its potential returns per unit of risk. National Bank of is currently generating about 0.09 per unit of risk. If you would invest 1,973 in Apple Inc CDR on September 12, 2024 and sell it today you would earn a total of 1,657 from holding Apple Inc CDR or generate 83.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc CDR vs. National Bank of
Performance |
| Timeline |
| Apple Inc CDR |
| National Bank |
Apple and National Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and National Bank
The main advantage of trading using opposite Apple and National Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple 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.| Apple vs. Doman Building Materials | Apple vs. Identillect Technologies Corp | Apple vs. NeXGold Mining Corp | Apple vs. Oculus VisionTech |
| National Bank vs. Brookfield Infrastructure Partners | National Bank vs. Brookfield Infrastructure Partners | National Bank vs. iShares Canadian HYBrid | National Bank vs. Solar Alliance Energy |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |