Correlation Between AJ Bell and NB Private
Can any of the company-specific risk be diversified away by investing in both AJ Bell and NB Private 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 AJ Bell and NB Private into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AJ Bell plc and NB Private Equity, you can compare the effects of market volatilities on AJ Bell and NB Private 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 AJ Bell with a short position of NB Private. Check out your portfolio center. Please also check ongoing floating volatility patterns of AJ Bell and NB Private.
Diversification Opportunities for AJ Bell and NB Private
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AJB and NBPE is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding AJ Bell plc and NB Private Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NB Private Equity and AJ Bell 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 AJ Bell plc are associated (or correlated) with NB Private. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NB Private Equity has no effect on the direction of AJ Bell i.e., AJ Bell and NB Private go up and down completely randomly.
Pair Corralation between AJ Bell and NB Private
Assuming the 90 days trading horizon AJ Bell plc is expected to generate 1.1 times more return on investment than NB Private. However, AJ Bell is 1.1 times more volatile than NB Private Equity. It trades about 0.12 of its potential returns per unit of risk. NB Private Equity is currently generating about -0.07 per unit of risk. If you would invest 45,400 in AJ Bell plc on August 30, 2024 and sell it today you would earn a total of 1,600 from holding AJ Bell plc or generate 3.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
AJ Bell plc vs. NB Private Equity
Performance |
| Timeline |
| AJ Bell plc |
| NB Private Equity |
AJ Bell and NB Private Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AJ Bell and NB Private
The main advantage of trading using opposite AJ Bell and NB Private positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AJ Bell position performs unexpectedly, NB Private 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 NB Private will offset losses from the drop in NB Private's long position.| AJ Bell vs. InterContinental Hotels Group | AJ Bell vs. Gamma Communications PLC | AJ Bell vs. Fonix Mobile plc | AJ Bell vs. Martin Marietta Materials |
| NB Private vs. Fulcrum Metals PLC | NB Private vs. Delta Air Lines | NB Private vs. Silvercorp Metals | NB Private vs. Golden Metal Resources |
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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