Correlation Between National Bank and Solid Impact
Can any of the company-specific risk be diversified away by investing in both National Bank and Solid Impact 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 Solid Impact 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 Solid Impact Investments, you can compare the effects of market volatilities on National Bank and Solid Impact 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 Solid Impact. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Bank and Solid Impact.
Diversification Opportunities for National Bank and Solid Impact
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between National and Solid is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding National Bank of and Solid Impact Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solid Impact Investments 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 Solid Impact. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solid Impact Investments has no effect on the direction of National Bank i.e., National Bank and Solid Impact go up and down completely randomly.
Pair Corralation between National Bank and Solid Impact
Assuming the 90 days trading horizon National Bank of is expected to generate 0.42 times more return on investment than Solid Impact. However, National Bank of is 2.38 times less risky than Solid Impact. It trades about 0.1 of its potential returns per unit of risk. Solid Impact Investments is currently generating about -0.07 per unit of risk. If you would invest 2,058 in National Bank of on October 12, 2024 and sell it today you would earn a total of 436.00 from holding National Bank of or generate 21.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Bank of vs. Solid Impact Investments
Performance |
| Timeline |
| National Bank |
| Solid Impact Investments |
National Bank and Solid Impact Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Bank and Solid Impact
The main advantage of trading using opposite National Bank and Solid Impact positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Bank position performs unexpectedly, Solid Impact 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 Solid Impact will offset losses from the drop in Solid Impact's long position.| National Bank vs. Diamond Estates Wines | National Bank vs. Firan Technology Group | National Bank vs. AKITA Drilling | National Bank vs. Marimaca Copper Corp |
| Solid Impact vs. Air Canada | Solid Impact vs. Westshore Terminals Investment | Solid Impact vs. Canadian General Investments | Solid Impact vs. Tree Island Steel |
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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