Correlation Between National Bank and GOLD ROAD
Can any of the company-specific risk be diversified away by investing in both National Bank and GOLD ROAD 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 GOLD ROAD 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 GOLD ROAD RES, you can compare the effects of market volatilities on National Bank and GOLD ROAD 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 GOLD ROAD. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Bank and GOLD ROAD.
Diversification Opportunities for National Bank and GOLD ROAD
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between National and GOLD is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding National Bank Holdings and GOLD ROAD RES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GOLD ROAD RES 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 GOLD ROAD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GOLD ROAD RES has no effect on the direction of National Bank i.e., National Bank and GOLD ROAD go up and down completely randomly.
Pair Corralation between National Bank and GOLD ROAD
Assuming the 90 days horizon National Bank Holdings is expected to under-perform the GOLD ROAD. In addition to that, National Bank is 1.62 times more volatile than GOLD ROAD RES. It trades about -0.16 of its total potential returns per unit of risk. GOLD ROAD RES is currently generating about 0.11 per unit of volatility. If you would invest 126.00 in GOLD ROAD RES on October 14, 2024 and sell it today you would earn a total of 3.00 from holding GOLD ROAD RES or generate 2.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Bank Holdings vs. GOLD ROAD RES
Performance |
| Timeline |
| National Bank Holdings |
| GOLD ROAD RES |
National Bank and GOLD ROAD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Bank and GOLD ROAD
The main advantage of trading using opposite National Bank and GOLD ROAD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Bank position performs unexpectedly, GOLD ROAD 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 GOLD ROAD will offset losses from the drop in GOLD ROAD's long position.| National Bank vs. Samsung Electronics Co | National Bank vs. CarsalesCom | National Bank vs. GRENKELEASING Dusseldorf | National Bank vs. STMicroelectronics NV |
| GOLD ROAD vs. TRADELINK ELECTRON | GOLD ROAD vs. Easy Software AG | GOLD ROAD vs. H2O Retailing | GOLD ROAD vs. AAC TECHNOLOGHLDGADR |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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