Correlation Between National Bank and Great West
Can any of the company-specific risk be diversified away by investing in both National Bank and Great West 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 Great West 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 Great West Lifeco, you can compare the effects of market volatilities on National Bank and Great West 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 Great West. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Bank and Great West.
Diversification Opportunities for National Bank and Great West
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between National and Great is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding National Bank of and Great West Lifeco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great West Lifeco 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 Great West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great West Lifeco has no effect on the direction of National Bank i.e., National Bank and Great West go up and down completely randomly.
Pair Corralation between National Bank and Great West
Assuming the 90 days trading horizon National Bank is expected to generate 1.24 times less return on investment than Great West. But when comparing it to its historical volatility, National Bank of is 1.27 times less risky than Great West. It trades about 0.13 of its potential returns per unit of risk. Great West Lifeco is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,952 in Great West Lifeco on September 3, 2024 and sell it today you would earn a total of 193.00 from holding Great West Lifeco or generate 9.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Bank of vs. Great West Lifeco
Performance |
| Timeline |
| National Bank |
| Great West Lifeco |
National Bank and Great West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Bank and Great West
The main advantage of trading using opposite National Bank and Great West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Bank position performs unexpectedly, Great West 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 Great West will offset losses from the drop in Great West's long position.| National Bank vs. Apple Inc CDR | National Bank vs. Microsoft Corp CDR | National Bank vs. Amazon CDR | National Bank vs. Alphabet Inc CDR |
| Great West vs. Bausch Health Companies | Great West vs. InPlay Oil Corp | Great West vs. Broadcom | Great West vs. NeuPath Health |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |