Correlation Between National Bank and Viohalco

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

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

Diversification Opportunities for National Bank and Viohalco

0.75

Correlation Coefficient

National Bank  Viohalco

Poor diversification

The 3 months correlation between National and Viohalco is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding National Bank of and Viohalco SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viohalco SA 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 of are associated (or correlated) with Viohalco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viohalco SA has no effect on the direction of National Bank i.e., National Bank and Viohalco go up and down completely randomly.

Pair Corralation between National Bank and Viohalco

Assuming the 90 days trading horizon National Bank of is expected to under-perform the Viohalco. In addition to that, National Bank is 1.06 times more volatile than Viohalco SA. It trades about -0.18 of its total potential returns per unit of risk. Viohalco SA is currently generating about 0.02 per unit of volatility. If you would invest  515.00  in Viohalco SA on September 1, 2024 and sell it today you would earn a total of  2.00  from holding Viohalco SA or generate 0.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.65%
Values	Daily Returns

National Bank of  vs.  Viohalco SA

National Bank

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days National Bank of has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Viohalco SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Viohalco SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with National Bank and Viohalco

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

The idea behind National Bank of and Viohalco SA 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.