Correlation Between NBI Liquid and Purpose Premium
Can any of the company-specific risk be diversified away by investing in both NBI Liquid and Purpose Premium 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 Purpose Premium 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 Purpose Premium Yield, you can compare the effects of market volatilities on NBI Liquid and Purpose Premium 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 Purpose Premium. Check out your portfolio center. Please also check ongoing floating volatility patterns of NBI Liquid and Purpose Premium.
Diversification Opportunities for NBI Liquid and Purpose Premium
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between NBI and Purpose is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding NBI Liquid Alternatives and Purpose Premium Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Purpose Premium Yield 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 Purpose Premium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Purpose Premium Yield has no effect on the direction of NBI Liquid i.e., NBI Liquid and Purpose Premium go up and down completely randomly.
Pair Corralation between NBI Liquid and Purpose Premium
Assuming the 90 days trading horizon NBI Liquid Alternatives is expected to under-perform the Purpose Premium. In addition to that, NBI Liquid is 2.21 times more volatile than Purpose Premium Yield. It trades about -0.01 of its total potential returns per unit of risk. Purpose Premium Yield is currently generating about 0.12 per unit of volatility. If you would invest 1,548 in Purpose Premium Yield on September 3, 2024 and sell it today you would earn a total of 223.00 from holding Purpose Premium Yield or generate 14.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NBI Liquid Alternatives vs. Purpose Premium Yield
Performance |
| Timeline |
| NBI Liquid Alternatives |
| Purpose Premium Yield |
NBI Liquid and Purpose Premium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NBI Liquid and Purpose Premium
The main advantage of trading using opposite NBI Liquid and Purpose Premium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NBI Liquid position performs unexpectedly, Purpose Premium 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 Purpose Premium will offset losses from the drop in Purpose Premium'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 |
| Purpose Premium vs. Purpose Core Dividend | Purpose Premium vs. Purpose International Dividend | Purpose Premium vs. Purpose Monthly Income | Purpose Premium vs. BMO Put Write |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |