Correlation Between National Bank and FIREWEED METALS
Can any of the company-specific risk be diversified away by investing in both National Bank and FIREWEED METALS 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 FIREWEED METALS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Bank Holdings and FIREWEED METALS P, you can compare the effects of market volatilities on National Bank and FIREWEED METALS 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 FIREWEED METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Bank and FIREWEED METALS.
Diversification Opportunities for National Bank and FIREWEED METALS
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between National and FIREWEED is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding National Bank Holdings and FIREWEED METALS P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIREWEED METALS P 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 Holdings are associated (or correlated) with FIREWEED METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIREWEED METALS P has no effect on the direction of National Bank i.e., National Bank and FIREWEED METALS go up and down completely randomly.
Pair Corralation between National Bank and FIREWEED METALS
Assuming the 90 days horizon National Bank Holdings is expected to generate 0.97 times more return on investment than FIREWEED METALS. However, National Bank Holdings is 1.03 times less risky than FIREWEED METALS. It trades about 0.1 of its potential returns per unit of risk. FIREWEED METALS P is currently generating about -0.01 per unit of risk. If you would invest 3,855 in National Bank Holdings on September 3, 2024 and sell it today you would earn a total of 625.00 from holding National Bank Holdings or generate 16.21% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
National Bank Holdings vs. FIREWEED METALS P
Performance |
Timeline |
National Bank Holdings |
FIREWEED METALS P |
National Bank and FIREWEED METALS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with National Bank and FIREWEED METALS
The main advantage of trading using opposite National Bank and FIREWEED METALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Bank position performs unexpectedly, FIREWEED METALS 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 FIREWEED METALS will offset losses from the drop in FIREWEED METALS's long position.National Bank vs. NXP Semiconductors NV | National Bank vs. ON SEMICONDUCTOR | National Bank vs. Tower One Wireless | National Bank vs. SK TELECOM TDADR |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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