Correlation Between National Bank and JS Bank
Can any of the company-specific risk be diversified away by investing in both National Bank and JS Bank 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 JS Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Bank of and JS Bank, you can compare the effects of market volatilities on National Bank and JS Bank 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 JS Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Bank and JS Bank.
Diversification Opportunities for National Bank and JS Bank
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between National and JSBL is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding National Bank of and JS Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JS Bank 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 of are associated (or correlated) with JS Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JS Bank has no effect on the direction of National Bank i.e., National Bank and JS Bank go up and down completely randomly.
Pair Corralation between National Bank and JS Bank
Assuming the 90 days trading horizon National Bank of is expected to generate 1.1 times more return on investment than JS Bank. However, National Bank is 1.1 times more volatile than JS Bank. It trades about 0.1 of its potential returns per unit of risk. JS Bank is currently generating about 0.06 per unit of risk. If you would invest 6,071 in National Bank of on November 6, 2024 and sell it today you would earn a total of 1,242 from holding National Bank of or generate 20.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Bank of vs. JS Bank
Performance |
| Timeline |
| National Bank |
| JS Bank |
National Bank and JS Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Bank and JS Bank
The main advantage of trading using opposite National Bank and JS Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Bank position performs unexpectedly, JS Bank 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 JS Bank will offset losses from the drop in JS Bank's long position.| National Bank vs. Ghandhara Automobile | National Bank vs. Data Agro | National Bank vs. Avanceon | National Bank vs. Pakistan Telecommunication |
| JS Bank vs. Reliance Insurance Co | JS Bank vs. IGI Life Insurance | JS Bank vs. Atlas Insurance | JS Bank vs. Jubilee Life Insurance |
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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