Correlation Between Westshore Terminals and National Bank
Can any of the company-specific risk be diversified away by investing in both Westshore Terminals 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 Westshore Terminals and National Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westshore Terminals Investment and National Bank of, you can compare the effects of market volatilities on Westshore Terminals 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 Westshore Terminals with a short position of National Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westshore Terminals and National Bank.
Diversification Opportunities for Westshore Terminals and National Bank
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Westshore and National is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Westshore Terminals Investment and National Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Bank and Westshore Terminals 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 Westshore Terminals Investment 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 Westshore Terminals i.e., Westshore Terminals and National Bank go up and down completely randomly.
Pair Corralation between Westshore Terminals and National Bank
Assuming the 90 days trading horizon Westshore Terminals Investment is expected to under-perform the National Bank. In addition to that, Westshore Terminals is 2.21 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 0.0 per unit of volatility. If you would invest 2,594 in National Bank of on October 22, 2024 and sell it today you would lose (1.00) from holding National Bank of or give up 0.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Westshore Terminals Investment vs. National Bank of
Performance |
| Timeline |
| Westshore Terminals |
| National Bank |
Westshore Terminals and National Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westshore Terminals and National Bank
The main advantage of trading using opposite Westshore Terminals and National Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westshore Terminals 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.| Westshore Terminals vs. Mullen Group | Westshore Terminals vs. Ritchie Bros Auctioneers | Westshore Terminals vs. Winpak | Westshore Terminals vs. North West |
| National Bank vs. Plaza Retail REIT | National Bank vs. Firan Technology Group | National Bank vs. HPQ Silicon Resources | National Bank vs. Exco Technologies Limited |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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