Correlation Between BANK CENTRAL and NOV
Can any of the company-specific risk be diversified away by investing in both BANK CENTRAL and NOV 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 BANK CENTRAL and NOV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BANK CENTRAL ASIA and NOV Inc, you can compare the effects of market volatilities on BANK CENTRAL and NOV 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 BANK CENTRAL with a short position of NOV. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK CENTRAL and NOV.
Diversification Opportunities for BANK CENTRAL and NOV
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BANK and NOV is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding BANK CENTRAL ASIA and NOV Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NOV Inc and BANK CENTRAL 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 BANK CENTRAL ASIA are associated (or correlated) with NOV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NOV Inc has no effect on the direction of BANK CENTRAL i.e., BANK CENTRAL and NOV go up and down completely randomly.
Pair Corralation between BANK CENTRAL and NOV
Assuming the 90 days trading horizon BANK CENTRAL is expected to generate 1.2 times less return on investment than NOV. But when comparing it to its historical volatility, BANK CENTRAL ASIA is 1.28 times less risky than NOV. It trades about 0.01 of its potential returns per unit of risk. NOV Inc is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,530 in NOV Inc on August 25, 2024 and sell it today you would earn a total of 15.00 from holding NOV Inc or generate 0.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.48% |
| Values | Daily Returns |
BANK CENTRAL ASIA vs. NOV Inc
Performance |
| Timeline |
| BANK CENTRAL ASIA |
| NOV Inc |
BANK CENTRAL and NOV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK CENTRAL and NOV
The main advantage of trading using opposite BANK CENTRAL and NOV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK CENTRAL position performs unexpectedly, NOV 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 NOV will offset losses from the drop in NOV's long position.| BANK CENTRAL vs. Apple Inc | BANK CENTRAL vs. Apple Inc | BANK CENTRAL vs. Apple Inc | BANK CENTRAL vs. Apple Inc |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Commodity Directory Find actively traded commodities issued by global exchanges |