Correlation Between FIH MOBILE and National Bank

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

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

Diversification Opportunities for FIH MOBILE and National Bank

0.46

Correlation Coefficient

FIH MOBILE  National Bank

Very weak diversification

The 3 months correlation between FIH and National is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding FIH MOBILE and National Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Bank and FIH MOBILE 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 FIH MOBILE 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 FIH MOBILE i.e., FIH MOBILE and National Bank go up and down completely randomly.

Pair Corralation between FIH MOBILE and National Bank

Assuming the 90 days trading horizon FIH MOBILE is expected to generate 2.67 times more return on investment than National Bank. However, FIH MOBILE is 2.67 times more volatile than National Bank of. It trades about 0.02 of its potential returns per unit of risk. National Bank of is currently generating about -0.19 per unit of risk. If you would invest  10.00  in FIH MOBILE on December 20, 2024 and sell it today you would earn a total of  0.00  from holding FIH MOBILE or generate 0.0% return on investment over 90 days.

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

FIH MOBILE  vs.  National Bank of

FIH MOBILE

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in FIH MOBILE are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, FIH MOBILE is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

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 fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with FIH MOBILE and National Bank

The main advantage of trading using opposite FIH MOBILE and National Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIH MOBILE 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 FIH MOBILE 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.