Correlation Between National Bank and GreenPower
Can any of the company-specific risk be diversified away by investing in both National Bank and GreenPower 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 GreenPower 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 GreenPower Motor, you can compare the effects of market volatilities on National Bank and GreenPower 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 GreenPower. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Bank and GreenPower.
Diversification Opportunities for National Bank and GreenPower
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between National and GreenPower is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding National Bank of and GreenPower Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenPower Motor 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 GreenPower. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GreenPower Motor has no effect on the direction of National Bank i.e., National Bank and GreenPower go up and down completely randomly.
Pair Corralation between National Bank and GreenPower
Assuming the 90 days trading horizon National Bank is expected to generate 1.73 times less return on investment than GreenPower. But when comparing it to its historical volatility, National Bank of is 9.03 times less risky than GreenPower. It trades about 0.14 of its potential returns per unit of risk. GreenPower Motor is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 127.00 in GreenPower Motor on November 3, 2024 and sell it today you would lose (7.00) from holding GreenPower Motor or give up 5.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Bank of vs. GreenPower Motor
Performance |
| Timeline |
| National Bank |
| GreenPower Motor |
National Bank and GreenPower Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Bank and GreenPower
The main advantage of trading using opposite National Bank and GreenPower positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Bank position performs unexpectedly, GreenPower 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 GreenPower will offset losses from the drop in GreenPower's long position.| National Bank vs. Leading Edge Materials | National Bank vs. Canadian Utilities Limited | National Bank vs. Costco Wholesale Corp | National Bank vs. Algonquin Power Utilities |
| GreenPower vs. NFI Group | GreenPower vs. Docebo Inc | GreenPower vs. WELL Health Technologies | GreenPower vs. Dye Durham |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |