Correlation Between NBI High and Accelerate Arbitrage
Can any of the company-specific risk be diversified away by investing in both NBI High and Accelerate Arbitrage 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 NBI High and Accelerate Arbitrage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NBI High Yield and Accelerate Arbitrage, you can compare the effects of market volatilities on NBI High and Accelerate Arbitrage 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 NBI High with a short position of Accelerate Arbitrage. Check out your portfolio center. Please also check ongoing floating volatility patterns of NBI High and Accelerate Arbitrage.
Diversification Opportunities for NBI High and Accelerate Arbitrage
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NBI and Accelerate is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding NBI High Yield and Accelerate Arbitrage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accelerate Arbitrage and NBI High 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 NBI High Yield are associated (or correlated) with Accelerate Arbitrage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accelerate Arbitrage has no effect on the direction of NBI High i.e., NBI High and Accelerate Arbitrage go up and down completely randomly.
Pair Corralation between NBI High and Accelerate Arbitrage
Assuming the 90 days trading horizon NBI High Yield is expected to generate 0.92 times more return on investment than Accelerate Arbitrage. However, NBI High Yield is 1.09 times less risky than Accelerate Arbitrage. It trades about 0.14 of its potential returns per unit of risk. Accelerate Arbitrage is currently generating about 0.05 per unit of risk. If you would invest 2,058 in NBI High Yield on September 3, 2024 and sell it today you would earn a total of 139.00 from holding NBI High Yield or generate 6.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NBI High Yield vs. Accelerate Arbitrage
Performance |
| Timeline |
| NBI High Yield |
| Accelerate Arbitrage |
NBI High and Accelerate Arbitrage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NBI High and Accelerate Arbitrage
The main advantage of trading using opposite NBI High and Accelerate Arbitrage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NBI High position performs unexpectedly, Accelerate Arbitrage 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 Accelerate Arbitrage will offset losses from the drop in Accelerate Arbitrage's long position.| NBI High vs. NBI Unconstrained Fixed | NBI High vs. NBI Active Canadian | NBI High vs. NBI Sustainable Canadian | NBI High vs. Picton Mahoney Fortified |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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