Correlation Between BLANTYRE HOTELS and NATIONAL BANK

Can any of the company-specific risk be diversified away by investing in both BLANTYRE HOTELS 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 BLANTYRE HOTELS and NATIONAL BANK into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BLANTYRE HOTELS LIMITED and NATIONAL BANK OF, you can compare the effects of market volatilities on BLANTYRE HOTELS 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 BLANTYRE HOTELS with a short position of NATIONAL BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of BLANTYRE HOTELS and NATIONAL BANK.

Diversification Opportunities for BLANTYRE HOTELS and NATIONAL BANK

-0.19

Correlation Coefficient

BLANTYRE HOTELS  NATIONAL BANK

Good diversification

The 3 months correlation between BLANTYRE and NATIONAL is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding BLANTYRE HOTELS LIMITED and NATIONAL BANK OF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NATIONAL BANK and BLANTYRE HOTELS 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 BLANTYRE HOTELS LIMITED 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 BLANTYRE HOTELS i.e., BLANTYRE HOTELS and NATIONAL BANK go up and down completely randomly.

Pair Corralation between BLANTYRE HOTELS and NATIONAL BANK

Assuming the 90 days trading horizon BLANTYRE HOTELS LIMITED is not expected to generate positive returns. However, BLANTYRE HOTELS LIMITED is 121.62 times less risky than NATIONAL BANK. It waists most of its returns potential to compensate for thr risk taken. NATIONAL BANK is generating about 0.33 per unit of risk. If you would invest  346,214  in NATIONAL BANK OF on December 29, 2024 and sell it today you would earn a total of  273,796  from holding NATIONAL BANK OF or generate 79.08% return on investment over 90 days.

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

BLANTYRE HOTELS LIMITED  vs.  NATIONAL BANK OF

BLANTYRE HOTELS

Risk-Adjusted Performance

Very Weak

Over the last 90 days BLANTYRE HOTELS LIMITED has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, BLANTYRE HOTELS is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

NATIONAL BANK

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in NATIONAL BANK OF are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, NATIONAL BANK exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BLANTYRE HOTELS and NATIONAL BANK

The main advantage of trading using opposite BLANTYRE HOTELS and NATIONAL BANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BLANTYRE HOTELS 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 BLANTYRE HOTELS LIMITED 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.