Correlation Between JSC National and Bannerman Resources
Can any of the company-specific risk be diversified away by investing in both JSC National and Bannerman Resources 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 JSC National and Bannerman Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JSC National Atomic and Bannerman Resources Limited, you can compare the effects of market volatilities on JSC National and Bannerman Resources 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 JSC National with a short position of Bannerman Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of JSC National and Bannerman Resources.
Diversification Opportunities for JSC National and Bannerman Resources
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between JSC and Bannerman is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding JSC National Atomic and Bannerman Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bannerman Resources and JSC National 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 JSC National Atomic are associated (or correlated) with Bannerman Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bannerman Resources has no effect on the direction of JSC National i.e., JSC National and Bannerman Resources go up and down completely randomly.
Pair Corralation between JSC National and Bannerman Resources
Assuming the 90 days trading horizon JSC National Atomic is expected to generate 0.43 times more return on investment than Bannerman Resources. However, JSC National Atomic is 2.33 times less risky than Bannerman Resources. It trades about 0.05 of its potential returns per unit of risk. Bannerman Resources Limited is currently generating about -0.02 per unit of risk. If you would invest 3,990 in JSC National Atomic on September 12, 2024 and sell it today you would earn a total of 40.00 from holding JSC National Atomic or generate 1.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
JSC National Atomic vs. Bannerman Resources Limited
Performance |
| Timeline |
| JSC National Atomic |
| Bannerman Resources |
JSC National and Bannerman Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JSC National and Bannerman Resources
The main advantage of trading using opposite JSC National and Bannerman Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JSC National position performs unexpectedly, Bannerman Resources 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 Bannerman Resources will offset losses from the drop in Bannerman Resources' long position.| JSC National vs. Zoom Video Communications | JSC National vs. Neometals | JSC National vs. Coor Service Management | JSC National vs. Fidelity Sustainable USD |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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