Correlation Between National Bank and Commercial International
Can any of the company-specific risk be diversified away by investing in both National Bank and Commercial International 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 Commercial International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Bank and Commercial International Bank Egypt, you can compare the effects of market volatilities on National Bank and Commercial International 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 Commercial International. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Bank and Commercial International.
Diversification Opportunities for National Bank and Commercial International
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between National and Commercial is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding National Bank and Commercial International Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commercial International 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 Commercial International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commercial International has no effect on the direction of National Bank i.e., National Bank and Commercial International go up and down completely randomly.
Pair Corralation between National Bank and Commercial International
Assuming the 90 days trading horizon National Bank is expected to under-perform the Commercial International. But the stock apears to be less risky and, when comparing its historical volatility, National Bank is 1.29 times less risky than Commercial International. The stock trades about -0.05 of its potential returns per unit of risk. The Commercial International Bank Egypt is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 5,311 in Commercial International Bank Egypt on November 19, 2024 and sell it today you would earn a total of 2,488 from holding Commercial International Bank Egypt or generate 46.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.74% |
| Values | Daily Returns |
National Bank vs. Commercial International Bank
Performance |
| Timeline |
| National Bank |
| Commercial International |
National Bank and Commercial International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Bank and Commercial International
The main advantage of trading using opposite National Bank and Commercial International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Bank position performs unexpectedly, Commercial International 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 Commercial International will offset losses from the drop in Commercial International'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 |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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