Correlation Between ADRIATIC METALS and National Bank

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

By analyzing existing cross correlation between ADRIATIC METALS LS 013355 and National Bank Holdings, you can compare the effects of market volatilities on ADRIATIC METALS 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 ADRIATIC METALS with a short position of National Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADRIATIC METALS and National Bank.

Diversification Opportunities for ADRIATIC METALS and National Bank

-0.3

Correlation Coefficient

ADRIATIC METALS  National Bank

Very good diversification

The 3 months correlation between ADRIATIC and National is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding ADRIATIC METALS LS 013355 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 ADRIATIC METALS 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 ADRIATIC METALS LS 013355 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 ADRIATIC METALS i.e., ADRIATIC METALS and National Bank go up and down completely randomly.

Pair Corralation between ADRIATIC METALS and National Bank

Assuming the 90 days trading horizon ADRIATIC METALS LS 013355 is expected to generate 2.93 times more return on investment than National Bank. However, ADRIATIC METALS is 2.93 times more volatile than National Bank Holdings. It trades about 0.08 of its potential returns per unit of risk. National Bank Holdings is currently generating about -0.13 per unit of risk. If you would invest  230.00  in ADRIATIC METALS LS 013355 on December 25, 2024 and sell it today you would earn a total of  38.00  from holding ADRIATIC METALS LS 013355 or generate 16.52% return on investment over 90 days.

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

ADRIATIC METALS LS 013355  vs.  National Bank Holdings

ADRIATIC METALS LS

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ADRIATIC METALS LS 013355 are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, ADRIATIC METALS reported solid returns over the last few months and may actually be approaching a breakup point.

National Bank Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days National Bank Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with ADRIATIC METALS and National Bank

The main advantage of trading using opposite ADRIATIC METALS and National Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADRIATIC METALS 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.

The idea behind ADRIATIC METALS LS 013355 and National Bank Holdings 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.