Correlation Between National Bank and SANOK RUBBER

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

By analyzing existing cross correlation between National Bank Holdings and SANOK RUBBER ZY, you can compare the effects of market volatilities on National Bank and SANOK RUBBER 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 SANOK RUBBER. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Bank and SANOK RUBBER.

Diversification Opportunities for National Bank and SANOK RUBBER

-0.69

Correlation Coefficient

National Bank  SANOK RUBBER

Excellent diversification

The 3 months correlation between National and SANOK is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding National Bank Holdings and SANOK RUBBER ZY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SANOK RUBBER ZY 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 Holdings are associated (or correlated) with SANOK RUBBER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SANOK RUBBER ZY has no effect on the direction of National Bank i.e., National Bank and SANOK RUBBER go up and down completely randomly.

Pair Corralation between National Bank and SANOK RUBBER

Assuming the 90 days horizon National Bank Holdings is expected to under-perform the SANOK RUBBER. But the stock apears to be less risky and, when comparing its historical volatility, National Bank Holdings is 1.37 times less risky than SANOK RUBBER. The stock trades about -0.12 of its potential returns per unit of risk. The SANOK RUBBER ZY is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  476.00  in SANOK RUBBER ZY on December 22, 2024 and sell it today you would earn a total of  48.00  from holding SANOK RUBBER ZY or generate 10.08% return on investment over 90 days.

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

National Bank Holdings  vs.  SANOK RUBBER ZY

National Bank Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days National Bank Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

SANOK RUBBER ZY

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SANOK RUBBER ZY are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, SANOK RUBBER may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with National Bank and SANOK RUBBER

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

The idea behind National Bank Holdings and SANOK RUBBER ZY 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.