Correlation Between National Bank and Computer Modelling
Can any of the company-specific risk be diversified away by investing in both National Bank and Computer Modelling 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 Computer Modelling 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 Computer Modelling Group, you can compare the effects of market volatilities on National Bank and Computer Modelling 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 Computer Modelling. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Bank and Computer Modelling.
Diversification Opportunities for National Bank and Computer Modelling
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between National and Computer is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding National Bank of and Computer Modelling Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Computer Modelling 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 Computer Modelling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Computer Modelling has no effect on the direction of National Bank i.e., National Bank and Computer Modelling go up and down completely randomly.
Pair Corralation between National Bank and Computer Modelling
Assuming the 90 days trading horizon National Bank is expected to generate 1.76 times less return on investment than Computer Modelling. But when comparing it to its historical volatility, National Bank of is 5.43 times less risky than Computer Modelling. It trades about 0.12 of its potential returns per unit of risk. Computer Modelling Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 930.00 in Computer Modelling Group on September 14, 2024 and sell it today you would earn a total of 159.00 from holding Computer Modelling Group or generate 17.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Bank of vs. Computer Modelling Group
Performance |
| Timeline |
| National Bank |
| Computer Modelling |
National Bank and Computer Modelling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Bank and Computer Modelling
The main advantage of trading using opposite National Bank and Computer Modelling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Bank position performs unexpectedly, Computer Modelling 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 Computer Modelling will offset losses from the drop in Computer Modelling's long position.| National Bank vs. Western Investment | National Bank vs. Osisko Metals | National Bank vs. Rogers Communications | National Bank vs. Westshore Terminals Investment |
| Computer Modelling vs. Adcore Inc | Computer Modelling vs. Emerge Commerce | Computer Modelling vs. Quisitive Technology Solutions | Computer Modelling vs. DGTL Holdings |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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