Correlation Between Can Fin and N B

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

By analyzing existing cross correlation between Can Fin Homes and N B I, you can compare the effects of market volatilities on Can Fin and N B 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 Can Fin with a short position of N B. Check out your portfolio center. Please also check ongoing floating volatility patterns of Can Fin and N B.

Diversification Opportunities for Can Fin and N B

-0.31

Correlation Coefficient

Can Fin  N B

Very good diversification

The 3 months correlation between Can and NBIFIN is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Can Fin Homes and N B I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on N B I and Can Fin 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 Can Fin Homes are associated (or correlated) with N B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of N B I has no effect on the direction of Can Fin i.e., Can Fin and N B go up and down completely randomly.

Pair Corralation between Can Fin and N B

Assuming the 90 days trading horizon Can Fin Homes is expected to under-perform the N B. But the stock apears to be less risky and, when comparing its historical volatility, Can Fin Homes is 1.85 times less risky than N B. The stock trades about -0.18 of its potential returns per unit of risk. The N B I is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  255,135  in N B I on October 24, 2024 and sell it today you would earn a total of  1,135  from holding N B I or generate 0.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Can Fin Homes  vs.  N B I

Can Fin Homes

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Can Fin Homes has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

N B I

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in N B I are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical and fundamental indicators, N B is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Can Fin and N B

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

The idea behind Can Fin Homes and N B I 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.