Correlation Between NBI Liquid and NBI Unconstrained
Can any of the company-specific risk be diversified away by investing in both NBI Liquid and NBI Unconstrained 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 Unconstrained 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 Unconstrained Fixed, you can compare the effects of market volatilities on NBI Liquid and NBI Unconstrained 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 Unconstrained. Check out your portfolio center. Please also check ongoing floating volatility patterns of NBI Liquid and NBI Unconstrained.
Diversification Opportunities for NBI Liquid and NBI Unconstrained
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NBI and NBI is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding NBI Liquid Alternatives and NBI Unconstrained Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NBI Unconstrained Fixed 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 Unconstrained. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NBI Unconstrained Fixed has no effect on the direction of NBI Liquid i.e., NBI Liquid and NBI Unconstrained go up and down completely randomly.
Pair Corralation between NBI Liquid and NBI Unconstrained
Assuming the 90 days trading horizon NBI Liquid Alternatives is expected to under-perform the NBI Unconstrained. In addition to that, NBI Liquid is 1.19 times more volatile than NBI Unconstrained Fixed. It trades about -0.01 of its total potential returns per unit of risk. NBI Unconstrained Fixed is currently generating about 0.04 per unit of volatility. If you would invest 1,979 in NBI Unconstrained Fixed on September 2, 2024 and sell it today you would earn a total of 163.00 from holding NBI Unconstrained Fixed or generate 8.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NBI Liquid Alternatives vs. NBI Unconstrained Fixed
Performance |
| Timeline |
| NBI Liquid Alternatives |
| NBI Unconstrained Fixed |
NBI Liquid and NBI Unconstrained Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NBI Liquid and NBI Unconstrained
The main advantage of trading using opposite NBI Liquid and NBI Unconstrained positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NBI Liquid position performs unexpectedly, NBI Unconstrained 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 Unconstrained will offset losses from the drop in NBI Unconstrained'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 Unconstrained vs. NBI High Yield | NBI Unconstrained vs. NBI Active Canadian | NBI Unconstrained vs. Picton Mahoney Fortified | NBI Unconstrained vs. NBI Liquid Alternatives |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |