Correlation Between ASPEN TECHINC and National Bank
Can any of the company-specific risk be diversified away by investing in both ASPEN TECHINC 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 ASPEN TECHINC and National Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASPEN TECHINC DL and National Bank Holdings, you can compare the effects of market volatilities on ASPEN TECHINC 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 ASPEN TECHINC with a short position of National Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASPEN TECHINC and National Bank.
Diversification Opportunities for ASPEN TECHINC and National Bank
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ASPEN and National is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding ASPEN TECHINC DL and National Bank Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Bank Holdings and ASPEN TECHINC 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 ASPEN TECHINC DL 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 Holdings has no effect on the direction of ASPEN TECHINC i.e., ASPEN TECHINC and National Bank go up and down completely randomly.
Pair Corralation between ASPEN TECHINC and National Bank
Assuming the 90 days horizon ASPEN TECHINC DL is expected to generate 0.22 times more return on investment than National Bank. However, ASPEN TECHINC DL is 4.62 times less risky than National Bank. It trades about 0.44 of its potential returns per unit of risk. National Bank Holdings is currently generating about -0.16 per unit of risk. If you would invest 23,400 in ASPEN TECHINC DL on October 16, 2024 and sell it today you would earn a total of 800.00 from holding ASPEN TECHINC DL or generate 3.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASPEN TECHINC DL vs. National Bank Holdings
Performance |
| Timeline |
| ASPEN TECHINC DL |
| National Bank Holdings |
ASPEN TECHINC and National Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASPEN TECHINC and National Bank
The main advantage of trading using opposite ASPEN TECHINC and National Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASPEN TECHINC 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.| ASPEN TECHINC vs. SOGECLAIR SA INH | ASPEN TECHINC vs. FAIR ISAAC | ASPEN TECHINC vs. INTERSHOP Communications Aktiengesellschaft | ASPEN TECHINC vs. Citic Telecom International |
| National Bank vs. Easy Software AG | National Bank vs. Plastic Omnium | National Bank vs. SANOK RUBBER ZY | National Bank vs. ASPEN TECHINC DL |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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