Correlation Between National Bank and Vogiatzoglou Systems

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Can any of the company-specific risk be diversified away by investing in both National Bank and Vogiatzoglou Systems 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 Vogiatzoglou Systems 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 Vogiatzoglou Systems SA, you can compare the effects of market volatilities on National Bank and Vogiatzoglou Systems 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 Vogiatzoglou Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Bank and Vogiatzoglou Systems.

Diversification Opportunities for National Bank and Vogiatzoglou Systems

0.56
  Correlation Coefficient

Very weak diversification

The 3 months correlation between National and Vogiatzoglou is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding National Bank of and Vogiatzoglou Systems SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vogiatzoglou Systems 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 Vogiatzoglou Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vogiatzoglou Systems has no effect on the direction of National Bank i.e., National Bank and Vogiatzoglou Systems go up and down completely randomly.

Pair Corralation between National Bank and Vogiatzoglou Systems

Assuming the 90 days trading horizon National Bank of is expected to generate 0.85 times more return on investment than Vogiatzoglou Systems. However, National Bank of is 1.18 times less risky than Vogiatzoglou Systems. It trades about -0.05 of its potential returns per unit of risk. Vogiatzoglou Systems SA is currently generating about -0.07 per unit of risk. If you would invest  769.00  in National Bank of on September 5, 2024 and sell it today you would lose (49.00) from holding National Bank of or give up 6.37% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy98.44%
ValuesDaily Returns

National Bank of  vs.  Vogiatzoglou Systems SA

 Performance 
       Timeline  
National Bank 

Risk-Adjusted Performance

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Weak
 
Strong
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 technical and fundamental indicators, National Bank is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.
Vogiatzoglou Systems 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Vogiatzoglou Systems SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

National Bank and Vogiatzoglou Systems Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with National Bank and Vogiatzoglou Systems

The main advantage of trading using opposite National Bank and Vogiatzoglou Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Bank position performs unexpectedly, Vogiatzoglou Systems 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 Vogiatzoglou Systems will offset losses from the drop in Vogiatzoglou Systems' long position.
The idea behind National Bank of and Vogiatzoglou Systems SA 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.

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