Correlation Between National Bank and Intertech
Can any of the company-specific risk be diversified away by investing in both National Bank and Intertech 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 Intertech 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 Intertech SA Inter, you can compare the effects of market volatilities on National Bank and Intertech 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 Intertech. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Bank and Intertech.
Diversification Opportunities for National Bank and Intertech
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between National and Intertech is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding National Bank of and Intertech SA Inter in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intertech SA Inter 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 Intertech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intertech SA Inter has no effect on the direction of National Bank i.e., National Bank and Intertech go up and down completely randomly.
Pair Corralation between National Bank and Intertech
Assuming the 90 days trading horizon National Bank of is expected to generate 0.79 times more return on investment than Intertech. However, National Bank of is 1.26 times less risky than Intertech. It trades about -0.05 of its potential returns per unit of risk. Intertech SA Inter is currently generating about -0.06 per unit of risk. If you would invest 775.00 in National Bank of on August 30, 2024 and sell it today you would lose (94.00) from holding National Bank of or give up 12.13% 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. Intertech SA Inter
Performance |
| Timeline |
| National Bank |
| Intertech SA Inter |
National Bank and Intertech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Bank and Intertech
The main advantage of trading using opposite National Bank and Intertech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Bank position performs unexpectedly, Intertech 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 Intertech will offset losses from the drop in Intertech's 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 |
| Intertech vs. Intracom Holdings SA | Intertech vs. Public Power | Intertech vs. Hellenic Petroleum SA | Intertech vs. National Bank 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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