Correlation Between ISign Media and National Bank
Can any of the company-specific risk be diversified away by investing in both ISign Media 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 ISign Media and National Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iSign Media Solutions and National Bank of, you can compare the effects of market volatilities on ISign Media 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 ISign Media with a short position of National Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of ISign Media and National Bank.
Diversification Opportunities for ISign Media and National Bank
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between ISign and National is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding iSign Media Solutions and National Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Bank and ISign Media 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 iSign Media Solutions 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 ISign Media i.e., ISign Media and National Bank go up and down completely randomly.
Pair Corralation between ISign Media and National Bank
Assuming the 90 days horizon iSign Media Solutions is expected to under-perform the National Bank. In addition to that, ISign Media is 3.1 times more volatile than National Bank of. It trades about -0.07 of its total potential returns per unit of risk. National Bank of is currently generating about 0.14 per unit of volatility. If you would invest 2,600 in National Bank of on October 7, 2024 and sell it today you would earn a total of 42.00 from holding National Bank of or generate 1.62% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
iSign Media Solutions vs. National Bank of
Performance |
Timeline |
iSign Media Solutions |
National Bank |
ISign Media and National Bank Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ISign Media and National Bank
The main advantage of trading using opposite ISign Media and National Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ISign Media 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.ISign Media vs. Mako Mining Corp | ISign Media vs. Ramp Metals | ISign Media vs. Aya Gold Silver | ISign Media vs. Atrium Mortgage Investment |
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Check out your portfolio center.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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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