Correlation Between Highwood Asset and National Bank
Can any of the company-specific risk be diversified away by investing in both Highwood Asset and National 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 Highwood Asset and National Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highwood Asset Management and National Bank of, you can compare the effects of market volatilities on Highwood Asset and National 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 Highwood Asset with a short position of National Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highwood Asset and National Bank.
Diversification Opportunities for Highwood Asset and National Bank
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Highwood and National is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Highwood Asset Management and National Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Bank and Highwood Asset 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 Highwood Asset Management are associated (or correlated) with National Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Bank has no effect on the direction of Highwood Asset i.e., Highwood Asset and National Bank go up and down completely randomly.
Pair Corralation between Highwood Asset and National Bank
Assuming the 90 days horizon Highwood Asset is expected to generate 1.4 times less return on investment than National Bank. In addition to that, Highwood Asset is 2.65 times more volatile than National Bank of. It trades about 0.03 of its total potential returns per unit of risk. National Bank of is currently generating about 0.1 per unit of volatility. If you would invest 2,058 in National Bank of on October 12, 2024 and sell it today you would earn a total of 436.00 from holding National Bank of or generate 21.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highwood Asset Management vs. National Bank of
Performance |
| Timeline |
| Highwood Asset Management |
| National Bank |
Highwood Asset and National Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highwood Asset and National Bank
The main advantage of trading using opposite Highwood Asset and National Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highwood Asset position performs unexpectedly, National 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 National Bank will offset losses from the drop in National Bank's long position.| Highwood Asset vs. Financial 15 Split | Highwood Asset vs. iSign Media Solutions | Highwood Asset vs. Postmedia Network Canada | Highwood Asset vs. First National Financial |
| National Bank vs. Diamond Estates Wines | National Bank vs. Firan Technology Group | National Bank vs. AKITA Drilling | National Bank vs. Marimaca Copper Corp |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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