Correlation Between National Bank and Optima Bank
Can any of the company-specific risk be diversified away by investing in both National Bank and Optima 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 National Bank and Optima Bank 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 Optima bank SA, you can compare the effects of market volatilities on National Bank and Optima 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 National Bank with a short position of Optima Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Bank and Optima Bank.
Diversification Opportunities for National Bank and Optima Bank
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between National and Optima is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding National Bank of and Optima bank SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Optima bank SA 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 Optima Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Optima bank SA has no effect on the direction of National Bank i.e., National Bank and Optima Bank go up and down completely randomly.
Pair Corralation between National Bank and Optima Bank
Assuming the 90 days trading horizon National Bank of is expected to under-perform the Optima Bank. In addition to that, National Bank is 1.8 times more volatile than Optima bank SA. It trades about -0.17 of its total potential returns per unit of risk. Optima bank SA is currently generating about 0.17 per unit of volatility. If you would invest 1,262 in Optima bank SA on August 28, 2024 and sell it today you would earn a total of 40.00 from holding Optima bank SA or generate 3.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Bank of vs. Optima bank SA
Performance |
| Timeline |
| National Bank |
| Optima bank SA |
National Bank and Optima Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Bank and Optima Bank
The main advantage of trading using opposite National Bank and Optima Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Bank position performs unexpectedly, Optima 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 Optima Bank will offset losses from the drop in Optima Bank'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 |
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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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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