Correlation Between National Bank and Rogers Communications
Can any of the company-specific risk be diversified away by investing in both National Bank and Rogers Communications 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 Rogers Communications 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 Rogers Communications, you can compare the effects of market volatilities on National Bank and Rogers Communications 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 Rogers Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Bank and Rogers Communications.
Diversification Opportunities for National Bank and Rogers Communications
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between National and Rogers is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding National Bank of and Rogers Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rogers Communications 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 Rogers Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rogers Communications has no effect on the direction of National Bank i.e., National Bank and Rogers Communications go up and down completely randomly.
Pair Corralation between National Bank and Rogers Communications
Assuming the 90 days trading horizon National Bank of is expected to generate 0.83 times more return on investment than Rogers Communications. However, National Bank of is 1.2 times less risky than Rogers Communications. It trades about 0.12 of its potential returns per unit of risk. Rogers Communications is currently generating about -0.04 per unit of risk. If you would invest 1,742 in National Bank of on September 3, 2024 and sell it today you would earn a total of 667.00 from holding National Bank of or generate 38.29% 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. Rogers Communications
Performance |
| Timeline |
| National Bank |
| Rogers Communications |
National Bank and Rogers Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Bank and Rogers Communications
The main advantage of trading using opposite National Bank and Rogers Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Bank position performs unexpectedly, Rogers Communications 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 Rogers Communications will offset losses from the drop in Rogers Communications' long position.| National Bank vs. Cogeco Communications | National Bank vs. Economic Investment Trust | National Bank vs. Richelieu Hardware | National Bank vs. Renoworks Software |
| Rogers Communications vs. Maple Peak Investments | Rogers Communications vs. Western Investment | Rogers Communications vs. TUT Fitness Group | Rogers Communications vs. Economic Investment Trust |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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