Correlation Between National Bank and LAMDA Development
Can any of the company-specific risk be diversified away by investing in both National Bank and LAMDA Development 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 LAMDA Development 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 LAMDA Development SA, you can compare the effects of market volatilities on National Bank and LAMDA Development 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 LAMDA Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Bank and LAMDA Development.
Diversification Opportunities for National Bank and LAMDA Development
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between National and LAMDA is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding National Bank of and LAMDA Development SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LAMDA Development 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 LAMDA Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LAMDA Development has no effect on the direction of National Bank i.e., National Bank and LAMDA Development go up and down completely randomly.
Pair Corralation between National Bank and LAMDA Development
Assuming the 90 days trading horizon National Bank of is expected to under-perform the LAMDA Development. In addition to that, National Bank is 1.19 times more volatile than LAMDA Development SA. It trades about -0.18 of its total potential returns per unit of risk. LAMDA Development SA is currently generating about -0.08 per unit of volatility. If you would invest 740.00 in LAMDA Development SA on September 1, 2024 and sell it today you would lose (21.00) from holding LAMDA Development SA or give up 2.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
National Bank of vs. LAMDA Development SA
Performance |
| Timeline |
| National Bank |
| LAMDA Development |
National Bank and LAMDA Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Bank and LAMDA Development
The main advantage of trading using opposite National Bank and LAMDA Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Bank position performs unexpectedly, LAMDA Development 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 LAMDA Development will offset losses from the drop in LAMDA Development'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 |
| LAMDA Development vs. National Bank of | LAMDA Development vs. N Leventeris SA | LAMDA Development vs. Eurobank Ergasias Services | LAMDA Development vs. Vogiatzoglou Systems SA |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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