Correlation Between National Bank and Act Financial
Can any of the company-specific risk be diversified away by investing in both National Bank and Act Financial 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 Act Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Bank and Act Financial, you can compare the effects of market volatilities on National Bank and Act Financial 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 Act Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Bank and Act Financial.
Diversification Opportunities for National Bank and Act Financial
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between National and Act is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding National Bank and Act Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Act Financial 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 are associated (or correlated) with Act Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Act Financial has no effect on the direction of National Bank i.e., National Bank and Act Financial go up and down completely randomly.
Pair Corralation between National Bank and Act Financial
Assuming the 90 days trading horizon National Bank is expected to generate 0.53 times more return on investment than Act Financial. However, National Bank is 1.9 times less risky than Act Financial. It trades about -0.05 of its potential returns per unit of risk. Act Financial is currently generating about -0.03 per unit of risk. If you would invest 2,003 in National Bank on September 12, 2024 and sell it today you would lose (703.00) from holding National Bank or give up 35.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 19.79% |
| Values | Daily Returns |
National Bank vs. Act Financial
Performance |
| Timeline |
| National Bank |
| Act Financial |
National Bank and Act Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Bank and Act Financial
The main advantage of trading using opposite National Bank and Act Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Bank position performs unexpectedly, Act Financial 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 Act Financial will offset losses from the drop in Act Financial's long position.| National Bank vs. Paint Chemicals Industries | National Bank vs. Reacap Financial Investments | National Bank vs. Egyptians For Investment | National Bank vs. Misr Oils Soap |
| Act Financial vs. Paint Chemicals Industries | Act Financial vs. Reacap Financial Investments | Act Financial vs. Egyptians For Investment | Act Financial vs. Misr Oils Soap |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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