Correlation Between National Capital and 1st Capital
Can any of the company-specific risk be diversified away by investing in both National Capital and 1st Capital 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 Capital and 1st Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Capital Bank and 1st Capital Bank, you can compare the effects of market volatilities on National Capital and 1st Capital 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 Capital with a short position of 1st Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Capital and 1st Capital.
Diversification Opportunities for National Capital and 1st Capital
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between National and 1st is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding National Capital Bank and 1st Capital Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1st Capital Bank and National Capital 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 Capital Bank are associated (or correlated) with 1st Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1st Capital Bank has no effect on the direction of National Capital i.e., National Capital and 1st Capital go up and down completely randomly.
Pair Corralation between National Capital and 1st Capital
If you would invest 5,682 in National Capital Bank on December 28, 2024 and sell it today you would earn a total of 1,318 from holding National Capital Bank or generate 23.2% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
National Capital Bank vs. 1st Capital Bank
Performance |
Timeline |
National Capital Bank |
1st Capital Bank |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
National Capital and 1st Capital Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with National Capital and 1st Capital
The main advantage of trading using opposite National Capital and 1st Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Capital position performs unexpectedly, 1st Capital 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 1st Capital will offset losses from the drop in 1st Capital's long position.National Capital vs. Delhi Bank Corp | National Capital vs. CCSB Financial Corp | National Capital vs. Bank of Utica | National Capital vs. BEO Bancorp |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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