Correlation Between Acciona SA and National Bank

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

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

Diversification Opportunities for Acciona SA and National Bank

-0.42

Correlation Coefficient

Acciona SA  National Bank

Very good diversification

The 3 months correlation between Acciona and National is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Acciona SA and National Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Bank and Acciona SA 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 Acciona SA 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 has no effect on the direction of Acciona SA i.e., Acciona SA and National Bank go up and down completely randomly.

Pair Corralation between Acciona SA and National Bank

Assuming the 90 days horizon Acciona SA is expected to generate 2.26 times more return on investment than National Bank. However, Acciona SA is 2.26 times more volatile than National Bank of. It trades about 0.12 of its potential returns per unit of risk. National Bank of is currently generating about -0.15 per unit of risk. If you would invest  11,137  in Acciona SA on December 21, 2024 and sell it today you would earn a total of  1,983  from holding Acciona SA or generate 17.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	91.53%
Values	Daily Returns

Acciona SA  vs.  National Bank of

Acciona SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Acciona SA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal forward indicators, Acciona SA reported solid returns over the last few months and may actually be approaching a breakup point.

National Bank

Risk-Adjusted Performance

Very Weak

Over the last 90 days National Bank of has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Acciona SA and National Bank

The main advantage of trading using opposite Acciona SA and National Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acciona SA 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 Acciona SA and National Bank of 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.