Correlation Between National Australia and EMvision Medical
Can any of the company-specific risk be diversified away by investing in both National Australia and EMvision Medical 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 Australia and EMvision Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Australia Bank and EMvision Medical Devices, you can compare the effects of market volatilities on National Australia and EMvision Medical 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 Australia with a short position of EMvision Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Australia and EMvision Medical.
Diversification Opportunities for National Australia and EMvision Medical
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between National and EMvision is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding National Australia Bank and EMvision Medical Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMvision Medical Devices and National Australia 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 Australia Bank are associated (or correlated) with EMvision Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMvision Medical Devices has no effect on the direction of National Australia i.e., National Australia and EMvision Medical go up and down completely randomly.
Pair Corralation between National Australia and EMvision Medical
Assuming the 90 days trading horizon National Australia Bank is expected to under-perform the EMvision Medical. But the preferred stock apears to be less risky and, when comparing its historical volatility, National Australia Bank is 14.6 times less risky than EMvision Medical. The preferred stock trades about -0.03 of its potential returns per unit of risk. The EMvision Medical Devices is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 196.00 in EMvision Medical Devices on September 1, 2024 and sell it today you would earn a total of 2.00 from holding EMvision Medical Devices or generate 1.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
National Australia Bank vs. EMvision Medical Devices
Performance |
| Timeline |
| National Australia Bank |
| EMvision Medical Devices |
National Australia and EMvision Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Australia and EMvision Medical
The main advantage of trading using opposite National Australia and EMvision Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Australia position performs unexpectedly, EMvision Medical 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 EMvision Medical will offset losses from the drop in EMvision Medical's long position.| National Australia vs. Westpac Banking | National Australia vs. Commonwealth Bank | National Australia vs. Commonwealth Bank of | National Australia vs. Commonwealth Bank of |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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