Correlation Between AKITA Drilling and National Bank
Can any of the company-specific risk be diversified away by investing in both AKITA Drilling 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 AKITA Drilling and National Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AKITA Drilling and National Bank of, you can compare the effects of market volatilities on AKITA Drilling 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 AKITA Drilling with a short position of National Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of AKITA Drilling and National Bank.
Diversification Opportunities for AKITA Drilling and National Bank
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AKITA and National is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding AKITA Drilling and National Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Bank and AKITA Drilling 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 AKITA Drilling 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 AKITA Drilling i.e., AKITA Drilling and National Bank go up and down completely randomly.
Pair Corralation between AKITA Drilling and National Bank
Assuming the 90 days trading horizon AKITA Drilling is expected to generate 1.81 times more return on investment than National Bank. However, AKITA Drilling is 1.81 times more volatile than National Bank of. It trades about 0.09 of its potential returns per unit of risk. National Bank of is currently generating about 0.16 per unit of risk. If you would invest 165.00 in AKITA Drilling on October 11, 2024 and sell it today you would earn a total of 5.00 from holding AKITA Drilling or generate 3.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AKITA Drilling vs. National Bank of
Performance |
| Timeline |
| AKITA Drilling |
| National Bank |
AKITA Drilling and National Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AKITA Drilling and National Bank
The main advantage of trading using opposite AKITA Drilling and National Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AKITA Drilling 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.| AKITA Drilling vs. Ensign Energy Services | AKITA Drilling vs. Total Energy Services | AKITA Drilling vs. PHX Energy Services | AKITA Drilling vs. Western Energy Services |
| National Bank vs. Diamond Estates Wines | National Bank vs. Firan Technology Group | National Bank vs. AKITA Drilling | National Bank vs. Marimaca Copper Corp |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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