Correlation Between Questor Technology and National Bank
Can any of the company-specific risk be diversified away by investing in both Questor Technology and National 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 Questor Technology and National Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Questor Technology and National Bank of, you can compare the effects of market volatilities on Questor Technology and National 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 Questor Technology with a short position of National Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Questor Technology and National Bank.
Diversification Opportunities for Questor Technology and National Bank
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Questor and National is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Questor Technology and National Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Bank and Questor Technology 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 Questor Technology are associated (or correlated) with National Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Bank has no effect on the direction of Questor Technology i.e., Questor Technology and National Bank go up and down completely randomly.
Pair Corralation between Questor Technology and National Bank
Assuming the 90 days horizon Questor Technology is expected to under-perform the National Bank. In addition to that, Questor Technology is 454.03 times more volatile than National Bank of. It trades about -0.08 of its total potential returns per unit of risk. National Bank of is currently generating about 0.38 per unit of volatility. If you would invest 2,499 in National Bank of on December 11, 2024 and sell it today you would earn a total of 1.00 from holding National Bank of or generate 0.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 35.0% |
| Values | Daily Returns |
Questor Technology vs. National Bank of
Performance |
| Timeline |
| Questor Technology |
| National Bank |
Risk-Adjusted Performance
OK
Weak | Strong |
Questor Technology and National Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Questor Technology and National Bank
The main advantage of trading using opposite Questor Technology and National Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Questor Technology position performs unexpectedly, National 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 National Bank will offset losses from the drop in National Bank's long position.The idea behind Questor Technology and National Bank of pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| National Bank vs. Enthusiast Gaming Holdings | National Bank vs. Thunderbird Entertainment Group | National Bank vs. Osisko Metals | National Bank vs. Andean Precious Metals |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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