Correlation Between Pollard Banknote and North American
Can any of the company-specific risk be diversified away by investing in both Pollard Banknote and North American 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 Pollard Banknote and North American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pollard Banknote Limited and North American Financial, you can compare the effects of market volatilities on Pollard Banknote and North American 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 Pollard Banknote with a short position of North American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pollard Banknote and North American.
Diversification Opportunities for Pollard Banknote and North American
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Pollard and North is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Pollard Banknote Limited and North American Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North American Financial and Pollard Banknote 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 Pollard Banknote Limited are associated (or correlated) with North American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North American Financial has no effect on the direction of Pollard Banknote i.e., Pollard Banknote and North American go up and down completely randomly.
Pair Corralation between Pollard Banknote and North American
Assuming the 90 days trading horizon Pollard Banknote Limited is expected to under-perform the North American. In addition to that, Pollard Banknote is 2.59 times more volatile than North American Financial. It trades about -0.02 of its total potential returns per unit of risk. North American Financial is currently generating about 0.17 per unit of volatility. If you would invest 541.00 in North American Financial on September 3, 2024 and sell it today you would earn a total of 211.00 from holding North American Financial or generate 39.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pollard Banknote Limited vs. North American Financial
Performance |
| Timeline |
| Pollard Banknote |
| North American Financial |
Pollard Banknote and North American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pollard Banknote and North American
The main advantage of trading using opposite Pollard Banknote and North American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pollard Banknote position performs unexpectedly, North American 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 North American will offset losses from the drop in North American's long position.| Pollard Banknote vs. TFI International | Pollard Banknote vs. Baylin Technologies | Pollard Banknote vs. Information Services |
| North American vs. Dividend Growth Split | North American vs. Dividend 15 Split | North American vs. Financial 15 Split | North American vs. Dividend 15 Split |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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