Correlation Between Act Financial and National Bank
Can any of the company-specific risk be diversified away by investing in both Act Financial 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 Act Financial and National Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Act Financial and National Bank, you can compare the effects of market volatilities on Act Financial 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 Act Financial with a short position of National Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Act Financial and National Bank.
Diversification Opportunities for Act Financial and National Bank
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Act and National is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Act Financial and National Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Bank and Act Financial 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 Act Financial 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 Act Financial i.e., Act Financial and National Bank go up and down completely randomly.
Pair Corralation between Act Financial and National Bank
Assuming the 90 days trading horizon Act Financial is expected to under-perform the National Bank. In addition to that, Act Financial is 1.9 times more volatile than National Bank. It trades about -0.03 of its total potential returns per unit of risk. National Bank is currently generating about -0.05 per unit of volatility. If you would invest 2,003 in National Bank on September 12, 2024 and sell it today you would lose (703.00) from holding National Bank or give up 35.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 19.79% |
| Values | Daily Returns |
Act Financial vs. National Bank
Performance |
| Timeline |
| Act Financial |
| National Bank |
Act Financial and National Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Act Financial and National Bank
The main advantage of trading using opposite Act Financial and National Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Act Financial 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.| Act Financial vs. Paint Chemicals Industries | Act Financial vs. Reacap Financial Investments | Act Financial vs. Egyptians For Investment | Act Financial vs. Misr Oils Soap |
| National Bank vs. Paint Chemicals Industries | National Bank vs. Reacap Financial Investments | National Bank vs. Egyptians For Investment | National Bank vs. Misr Oils Soap |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |