Correlation Between National Bank and Gunpoint Exploration

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

Diversification Opportunities for National Bank and Gunpoint Exploration

-0.51

Correlation Coefficient

National Bank  Gunpoint Exploration

Excellent diversification

The 3 months correlation between National and Gunpoint is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding National Bank of and Gunpoint Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gunpoint Exploration 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 Gunpoint Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gunpoint Exploration has no effect on the direction of National Bank i.e., National Bank and Gunpoint Exploration go up and down completely randomly.

Pair Corralation between National Bank and Gunpoint Exploration

Assuming the 90 days trading horizon National Bank of is expected to generate 0.15 times more return on investment than Gunpoint Exploration. However, National Bank of is 6.71 times less risky than Gunpoint Exploration. It trades about 0.2 of its potential returns per unit of risk. Gunpoint Exploration is currently generating about -0.01 per unit of risk. If you would invest  2,272  in National Bank of on September 12, 2024 and sell it today you would earn a total of  147.00  from holding National Bank of or generate 6.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

National Bank of  vs.  Gunpoint Exploration

National Bank

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in National Bank of are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, National Bank may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Gunpoint Exploration

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gunpoint Exploration has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Gunpoint Exploration is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with National Bank and Gunpoint Exploration

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

The idea behind National Bank of and Gunpoint Exploration 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.