Correlation Between Therma Bright and National Bank
Can any of the company-specific risk be diversified away by investing in both Therma Bright 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 Therma Bright and National Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Therma Bright and National Bank of, you can compare the effects of market volatilities on Therma Bright 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 Therma Bright with a short position of National Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Therma Bright and National Bank.
Diversification Opportunities for Therma Bright and National Bank
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Therma and National is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Therma Bright and National Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Bank and Therma Bright 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 Therma Bright 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 Therma Bright i.e., Therma Bright and National Bank go up and down completely randomly.
Pair Corralation between Therma Bright and National Bank
Assuming the 90 days trading horizon Therma Bright is expected to under-perform the National Bank. In addition to that, Therma Bright is 27.07 times more volatile than National Bank of. It trades about -0.2 of its total potential returns per unit of risk. National Bank of is currently generating about 0.16 per unit of volatility. If you would invest 2,580 in National Bank of on August 29, 2024 and sell it today you would earn a total of 31.00 from holding National Bank of or generate 1.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Therma Bright vs. National Bank of
Performance |
| Timeline |
| Therma Bright |
| National Bank |
Therma Bright and National Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Therma Bright and National Bank
The main advantage of trading using opposite Therma Bright and National Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Therma Bright 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.| Therma Bright vs. Solar Alliance Energy | Therma Bright vs. Braille Energy Systems | Therma Bright vs. MedMira | Therma Bright vs. Lite Access Technologies |
| National Bank vs. UnitedHealth Group CDR | National Bank vs. Pembina Pipeline Corp | National Bank vs. Comprehensive Healthcare Systems | National Bank vs. Bausch Health Companies |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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