Correlation Between National Bank and Interwood Xylemporia
Can any of the company-specific risk be diversified away by investing in both National Bank and Interwood Xylemporia 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 Interwood Xylemporia 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 Interwood Xylemporia ATENE, you can compare the effects of market volatilities on National Bank and Interwood Xylemporia 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 Interwood Xylemporia. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Bank and Interwood Xylemporia.
Diversification Opportunities for National Bank and Interwood Xylemporia
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between National and Interwood is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding National Bank of and Interwood Xylemporia ATENE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interwood Xylemporia 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 Interwood Xylemporia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interwood Xylemporia has no effect on the direction of National Bank i.e., National Bank and Interwood Xylemporia go up and down completely randomly.
Pair Corralation between National Bank and Interwood Xylemporia
Assuming the 90 days trading horizon National Bank of is expected to generate 0.65 times more return on investment than Interwood Xylemporia. However, National Bank of is 1.55 times less risky than Interwood Xylemporia. It trades about 0.07 of its potential returns per unit of risk. Interwood Xylemporia ATENE is currently generating about 0.03 per unit of risk. If you would invest 354.00 in National Bank of on September 3, 2024 and sell it today you would earn a total of 313.00 from holding National Bank of or generate 88.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Bank of vs. Interwood Xylemporia ATENE
Performance |
| Timeline |
| National Bank |
| Interwood Xylemporia |
National Bank and Interwood Xylemporia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Bank and Interwood Xylemporia
The main advantage of trading using opposite National Bank and Interwood Xylemporia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Bank position performs unexpectedly, Interwood Xylemporia 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 Interwood Xylemporia will offset losses from the drop in Interwood Xylemporia'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 |
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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