Correlation Between National Bank and Security Investment
Can any of the company-specific risk be diversified away by investing in both National Bank and Security Investment 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 Security Investment 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 Security Investment Bank, you can compare the effects of market volatilities on National Bank and Security Investment 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 Security Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Bank and Security Investment.
Diversification Opportunities for National Bank and Security Investment
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between National and Security is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding National Bank of and Security Investment Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Security Investment 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 Security Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Security Investment Bank has no effect on the direction of National Bank i.e., National Bank and Security Investment go up and down completely randomly.
Pair Corralation between National Bank and Security Investment
Assuming the 90 days trading horizon National Bank is expected to generate 1.86 times less return on investment than Security Investment. But when comparing it to its historical volatility, National Bank of is 3.63 times less risky than Security Investment. It trades about 0.11 of its potential returns per unit of risk. Security Investment Bank is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 384.00 in Security Investment Bank on August 31, 2024 and sell it today you would earn a total of 116.00 from holding Security Investment Bank or generate 30.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 47.84% |
| Values | Daily Returns |
National Bank of vs. Security Investment Bank
Performance |
| Timeline |
| National Bank |
| Security Investment Bank |
National Bank and Security Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Bank and Security Investment
The main advantage of trading using opposite National Bank and Security Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Bank position performs unexpectedly, Security Investment 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 Security Investment will offset losses from the drop in Security Investment's long position.| National Bank vs. Ittehad Chemicals | National Bank vs. Hi Tech Lubricants | National Bank vs. Pak Gulf Leasing | National Bank vs. Grays Leasing |
| Security Investment vs. Masood Textile Mills | Security Investment vs. Fauji Foods | Security Investment vs. KSB Pumps | Security Investment vs. Mari Petroleum |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Commodity Directory Find actively traded commodities issued by global exchanges |