Correlation Between National Bank and CORONGLRES CDIS101
Can any of the company-specific risk be diversified away by investing in both National Bank and CORONGLRES CDIS101 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 CORONGLRES CDIS101 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Bank Holdings and CORONGLRES CDIS101, you can compare the effects of market volatilities on National Bank and CORONGLRES CDIS101 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 CORONGLRES CDIS101. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Bank and CORONGLRES CDIS101.
Diversification Opportunities for National Bank and CORONGLRES CDIS101
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between National and CORONGLRES is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding National Bank Holdings and CORONGLRES CDIS101 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CORONGLRES CDIS101 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 Holdings are associated (or correlated) with CORONGLRES CDIS101. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CORONGLRES CDIS101 has no effect on the direction of National Bank i.e., National Bank and CORONGLRES CDIS101 go up and down completely randomly.
Pair Corralation between National Bank and CORONGLRES CDIS101
Assuming the 90 days horizon National Bank Holdings is expected to generate 0.73 times more return on investment than CORONGLRES CDIS101. However, National Bank Holdings is 1.36 times less risky than CORONGLRES CDIS101. It trades about 0.11 of its potential returns per unit of risk. CORONGLRES CDIS101 is currently generating about -0.07 per unit of risk. If you would invest 3,294 in National Bank Holdings on September 12, 2024 and sell it today you would earn a total of 1,086 from holding National Bank Holdings or generate 32.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.22% |
| Values | Daily Returns |
National Bank Holdings vs. CORONGLRES CDIS101
Performance |
| Timeline |
| National Bank Holdings |
| CORONGLRES CDIS101 |
National Bank and CORONGLRES CDIS101 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Bank and CORONGLRES CDIS101
The main advantage of trading using opposite National Bank and CORONGLRES CDIS101 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Bank position performs unexpectedly, CORONGLRES CDIS101 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 CORONGLRES CDIS101 will offset losses from the drop in CORONGLRES CDIS101's long position.| National Bank vs. Fifth Third Bancorp | National Bank vs. Regions Financial | National Bank vs. Superior Plus Corp | National Bank vs. SIVERS SEMICONDUCTORS AB |
| CORONGLRES CDIS101 vs. Superior Plus Corp | CORONGLRES CDIS101 vs. SIVERS SEMICONDUCTORS AB | CORONGLRES CDIS101 vs. Norsk Hydro ASA | CORONGLRES CDIS101 vs. Reliance Steel Aluminum |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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