Correlation Between NBI Liquid and NBI Sustainable
Can any of the company-specific risk be diversified away by investing in both NBI Liquid and NBI Sustainable 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 NBI Liquid and NBI Sustainable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NBI Liquid Alternatives and NBI Sustainable Global, you can compare the effects of market volatilities on NBI Liquid and NBI Sustainable 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 NBI Liquid with a short position of NBI Sustainable. Check out your portfolio center. Please also check ongoing floating volatility patterns of NBI Liquid and NBI Sustainable.
Diversification Opportunities for NBI Liquid and NBI Sustainable
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NBI and NBI is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding NBI Liquid Alternatives and NBI Sustainable Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NBI Sustainable Global and NBI Liquid 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 NBI Liquid Alternatives are associated (or correlated) with NBI Sustainable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NBI Sustainable Global has no effect on the direction of NBI Liquid i.e., NBI Liquid and NBI Sustainable go up and down completely randomly.
Pair Corralation between NBI Liquid and NBI Sustainable
Assuming the 90 days trading horizon NBI Liquid Alternatives is expected to under-perform the NBI Sustainable. But the etf apears to be less risky and, when comparing its historical volatility, NBI Liquid Alternatives is 1.5 times less risky than NBI Sustainable. The etf trades about -0.02 of its potential returns per unit of risk. The NBI Sustainable Global is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 3,553 in NBI Sustainable Global on September 3, 2024 and sell it today you would earn a total of 757.00 from holding NBI Sustainable Global or generate 21.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NBI Liquid Alternatives vs. NBI Sustainable Global
Performance |
| Timeline |
| NBI Liquid Alternatives |
| NBI Sustainable Global |
NBI Liquid and NBI Sustainable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NBI Liquid and NBI Sustainable
The main advantage of trading using opposite NBI Liquid and NBI Sustainable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NBI Liquid position performs unexpectedly, NBI Sustainable 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 NBI Sustainable will offset losses from the drop in NBI Sustainable's long position.| NBI Liquid vs. AGFiQ Market Neutral | NBI Liquid vs. Picton Mahoney Fortified | NBI Liquid vs. Purpose Diversified Real | NBI Liquid vs. Desjardins Alt LongShort |
| NBI Sustainable vs. First Asset Energy | NBI Sustainable vs. First Asset Tech | NBI Sustainable vs. Harvest Equal Weight | NBI Sustainable vs. CI Canada Lifeco |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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