Correlation Between Aozora Bank and National Bank
Can any of the company-specific risk be diversified away by investing in both Aozora Bank 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 Aozora Bank and National Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aozora Bank and National Bank of, you can compare the effects of market volatilities on Aozora Bank 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 Aozora Bank with a short position of National Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aozora Bank and National Bank.
Diversification Opportunities for Aozora Bank and National Bank
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Aozora and National is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Aozora Bank and National Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Bank and Aozora Bank 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 Aozora Bank 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 Aozora Bank i.e., Aozora Bank and National Bank go up and down completely randomly.
Pair Corralation between Aozora Bank and National Bank
If you would invest 717.00 in National Bank of on October 22, 2024 and sell it today you would earn a total of 123.00 from holding National Bank of or generate 17.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 0.44% |
| Values | Daily Returns |
Aozora Bank vs. National Bank of
Performance |
| Timeline |
| Aozora Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| National Bank |
Aozora Bank and National Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aozora Bank and National Bank
The main advantage of trading using opposite Aozora Bank and National Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aozora Bank 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.| Aozora Bank vs. Taiwan Semiconductor Manufacturing | Aozora Bank vs. Globalfoundries | Aozora Bank vs. Arm Holdings plc | Aozora Bank vs. Semtech |
| National Bank vs. Alpha Bank SA | National Bank vs. Eurobank Ergasias SA | National Bank vs. Piraeus Bank SA | National Bank vs. PT Bank Central |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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