Correlation Between National Bank and Moonpig Group

Can any of the company-specific risk be diversified away by investing in both National Bank and Moonpig Group 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 National Bank and Moonpig Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between National Bank of and Moonpig Group PLC, you can compare the effects of market volatilities on National Bank and Moonpig Group 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 National Bank with a short position of Moonpig Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Bank and Moonpig Group.

Diversification Opportunities for National Bank and Moonpig Group

0.0

Correlation Coefficient

National Bank  Moonpig Group

Pay attention - limited upside

The 3 months correlation between National and Moonpig is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding National Bank of and Moonpig Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moonpig Group PLC and National Bank 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 National Bank of are associated (or correlated) with Moonpig Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moonpig Group PLC has no effect on the direction of National Bank i.e., National Bank and Moonpig Group go up and down completely randomly.

Pair Corralation between National Bank and Moonpig Group

If you would invest  20,300  in Moonpig Group PLC on September 14, 2024 and sell it today you would earn a total of  1,700  from holding Moonpig Group PLC or generate 8.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

National Bank of  vs.  Moonpig Group PLC

National Bank

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days National Bank of has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, National Bank is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Moonpig Group PLC

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Moonpig Group PLC are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Moonpig Group may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with National Bank and Moonpig Group

The main advantage of trading using opposite National Bank and Moonpig Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Bank position performs unexpectedly, Moonpig Group 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 Moonpig Group will offset losses from the drop in Moonpig Group's long position.

The idea behind National Bank of and Moonpig Group PLC 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.

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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.