Correlation Between National Bank and Telus Corp
Can any of the company-specific risk be diversified away by investing in both National Bank and Telus Corp 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 Telus Corp 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 Telus Corp, you can compare the effects of market volatilities on National Bank and Telus Corp 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 Telus Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Bank and Telus Corp.
Diversification Opportunities for National Bank and Telus Corp
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between National and Telus is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding National Bank of and Telus Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telus Corp 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 Telus Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telus Corp has no effect on the direction of National Bank i.e., National Bank and Telus Corp go up and down completely randomly.
Pair Corralation between National Bank and Telus Corp
Assuming the 90 days horizon National Bank of is expected to generate 0.58 times more return on investment than Telus Corp. However, National Bank of is 1.72 times less risky than Telus Corp. It trades about 0.33 of its potential returns per unit of risk. Telus Corp is currently generating about 0.0 per unit of risk. If you would invest 12,273 in National Bank of on September 3, 2024 and sell it today you would earn a total of 1,598 from holding National Bank of or generate 13.02% 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. Telus Corp
Performance |
| Timeline |
| National Bank |
| Telus Corp |
National Bank and Telus Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Bank and Telus Corp
The main advantage of trading using opposite National Bank and Telus Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Bank position performs unexpectedly, Telus Corp 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 Telus Corp will offset losses from the drop in Telus Corp's long position.| National Bank vs. Canadian Imperial Bank | National Bank vs. Bank of Montreal | National Bank vs. Royal Bank of | National Bank vs. Bank of Nova |
| Telus Corp vs. BCE Inc | Telus Corp vs. Fortis Inc | Telus Corp vs. Enbridge | Telus Corp vs. Toronto Dominion Bank |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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