Correlation Between Faction Investment and National Bank

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

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

Diversification Opportunities for Faction Investment and National Bank

0.0

Correlation Coefficient

Faction Investment  National Bank

Pay attention - limited upside

The 3 months correlation between Faction and National is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Faction Investment Group and National Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Bank and Faction Investment 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 Faction Investment Group 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 Faction Investment i.e., Faction Investment and National Bank go up and down completely randomly.

Pair Corralation between Faction Investment and National Bank

If you would invest  2,415  in National Bank of on October 4, 2024 and sell it today you would earn a total of  120.00  from holding National Bank of or generate 4.97% return on investment over 90 days.

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

Faction Investment Group  vs.  National Bank of

Faction Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Faction Investment Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Faction Investment is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

National Bank

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in National Bank of are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, National Bank may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Faction Investment and National Bank

The main advantage of trading using opposite Faction Investment and National Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Faction Investment 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 Faction Investment Group 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.