Correlation Between National Bank and InsuraGuest Technologies

Can any of the company-specific risk be diversified away by investing in both National Bank and InsuraGuest Technologies 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 InsuraGuest Technologies 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 InsuraGuest Technologies, you can compare the effects of market volatilities on National Bank and InsuraGuest Technologies 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 InsuraGuest Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Bank and InsuraGuest Technologies.

Diversification Opportunities for National Bank and InsuraGuest Technologies

0.15

Correlation Coefficient

National Bank  InsuraGuest Technologies

Average diversification

The 3 months correlation between National and InsuraGuest is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding National Bank of and InsuraGuest Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InsuraGuest Technologies 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 InsuraGuest Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InsuraGuest Technologies has no effect on the direction of National Bank i.e., National Bank and InsuraGuest Technologies go up and down completely randomly.

Pair Corralation between National Bank and InsuraGuest Technologies

Assuming the 90 days trading horizon National Bank is expected to generate 8107.0 times less return on investment than InsuraGuest Technologies. But when comparing it to its historical volatility, National Bank of is 31.32 times less risky than InsuraGuest Technologies. It trades about 0.0 of its potential returns per unit of risk. InsuraGuest Technologies is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  2.00  in InsuraGuest Technologies on December 26, 2024 and sell it today you would earn a total of  1.50  from holding InsuraGuest Technologies or generate 75.0% return on investment over 90 days.

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

National Bank of  vs.  InsuraGuest Technologies

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. In spite of comparatively stable basic indicators, National Bank is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

InsuraGuest Technologies

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in InsuraGuest Technologies are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, InsuraGuest Technologies showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with National Bank and InsuraGuest Technologies

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

The idea behind National Bank of and InsuraGuest Technologies 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.

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.