Correlation Between National Bank and Austriacard Holdings
Can any of the company-specific risk be diversified away by investing in both National Bank and Austriacard Holdings 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 National Bank and Austriacard Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Bank of and Austriacard Holdings AG, you can compare the effects of market volatilities on National Bank and Austriacard Holdings 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 National Bank with a short position of Austriacard Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Bank and Austriacard Holdings.
Diversification Opportunities for National Bank and Austriacard Holdings
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between National and Austriacard is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding National Bank of and Austriacard Holdings AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Austriacard Holdings and National 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 National Bank of are associated (or correlated) with Austriacard Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Austriacard Holdings has no effect on the direction of National Bank i.e., National Bank and Austriacard Holdings go up and down completely randomly.
Pair Corralation between National Bank and Austriacard Holdings
Assuming the 90 days trading horizon National Bank of is expected to under-perform the Austriacard Holdings. In addition to that, National Bank is 1.39 times more volatile than Austriacard Holdings AG. It trades about -0.16 of its total potential returns per unit of risk. Austriacard Holdings AG is currently generating about -0.05 per unit of volatility. If you would invest 550.00 in Austriacard Holdings AG on August 30, 2024 and sell it today you would lose (8.00) from holding Austriacard Holdings AG or give up 1.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Bank of vs. Austriacard Holdings AG
Performance |
| Timeline |
| National Bank |
| Austriacard Holdings |
National Bank and Austriacard Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Bank and Austriacard Holdings
The main advantage of trading using opposite National Bank and Austriacard Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Bank position performs unexpectedly, Austriacard Holdings 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 Austriacard Holdings will offset losses from the drop in Austriacard Holdings' long position.| National Bank vs. Alpha Services and | National Bank vs. Eurobank Ergasias Services | National Bank vs. Piraeus Financial Holdings | National Bank vs. Greek Organization of |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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