Correlation Between CN YANGTPWR and National Bank
Can any of the company-specific risk be diversified away by investing in both CN YANGTPWR 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 CN YANGTPWR and National Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CN YANGTPWR GDR and National Bank Holdings, you can compare the effects of market volatilities on CN YANGTPWR 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 CN YANGTPWR with a short position of National Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of CN YANGTPWR and National Bank.
Diversification Opportunities for CN YANGTPWR and National Bank
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CYZB and National is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding CN YANGTPWR GDR and National Bank Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Bank Holdings and CN YANGTPWR 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 CN YANGTPWR GDR 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 Holdings has no effect on the direction of CN YANGTPWR i.e., CN YANGTPWR and National Bank go up and down completely randomly.
Pair Corralation between CN YANGTPWR and National Bank
Assuming the 90 days trading horizon CN YANGTPWR GDR is expected to generate 2.65 times more return on investment than National Bank. However, CN YANGTPWR is 2.65 times more volatile than National Bank Holdings. It trades about 0.25 of its potential returns per unit of risk. National Bank Holdings is currently generating about -0.05 per unit of risk. If you would invest 3,500 in CN YANGTPWR GDR on November 28, 2024 and sell it today you would earn a total of 700.00 from holding CN YANGTPWR GDR or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CN YANGTPWR GDR vs. National Bank Holdings
Performance |
| Timeline |
| CN YANGTPWR GDR |
| National Bank Holdings |
CN YANGTPWR and National Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CN YANGTPWR and National Bank
The main advantage of trading using opposite CN YANGTPWR and National Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CN YANGTPWR 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.| CN YANGTPWR vs. 24SEVENOFFICE GROUP AB | CN YANGTPWR vs. Tower One Wireless | CN YANGTPWR vs. Alfa Financial Software | CN YANGTPWR vs. Kingdee International Software |
| National Bank vs. SPORT LISBOA E | National Bank vs. Cass Information Systems | National Bank vs. SCIENCE IN SPORT | National Bank vs. BII Railway Transportation |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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