Correlation Between NBI High and Forstrong Global
Can any of the company-specific risk be diversified away by investing in both NBI High and Forstrong Global 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 Forstrong Global 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 Forstrong Global Ex North, you can compare the effects of market volatilities on NBI High and Forstrong Global 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 Forstrong Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of NBI High and Forstrong Global.
Diversification Opportunities for NBI High and Forstrong Global
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between NBI and Forstrong is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding NBI High Yield and Forstrong Global Ex North in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forstrong Global 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 Forstrong Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forstrong Global has no effect on the direction of NBI High i.e., NBI High and Forstrong Global go up and down completely randomly.
Pair Corralation between NBI High and Forstrong Global
Assuming the 90 days trading horizon NBI High Yield is expected to generate 0.98 times more return on investment than Forstrong Global. However, NBI High Yield is 1.02 times less risky than Forstrong Global. It trades about 0.03 of its potential returns per unit of risk. Forstrong Global Ex North is currently generating about -0.05 per unit of risk. If you would invest 1,887 in NBI High Yield on September 3, 2024 and sell it today you would earn a total of 310.00 from holding NBI High Yield or generate 16.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 89.49% |
| Values | Daily Returns |
NBI High Yield vs. Forstrong Global Ex North
Performance |
| Timeline |
| NBI High Yield |
| Forstrong Global |
NBI High and Forstrong Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NBI High and Forstrong Global
The main advantage of trading using opposite NBI High and Forstrong Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NBI High position performs unexpectedly, Forstrong Global 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 Forstrong Global will offset losses from the drop in Forstrong Global'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 |
| Forstrong Global vs. Forstrong Global Growth | Forstrong Global vs. Forstrong Emerging Markets | Forstrong Global vs. Forstrong Global Income | Forstrong Global vs. NBI High Yield |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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