Correlation Between National Bank and BetterU Education

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

Diversification Opportunities for National Bank and BetterU Education

0.0

Correlation Coefficient

National Bank  BetterU Education

Pay attention - limited upside

The 3 months correlation between National and BetterU is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding National Bank Holdings and betterU Education Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on betterU Education Corp 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 BetterU Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of betterU Education Corp has no effect on the direction of National Bank i.e., National Bank and BetterU Education go up and down completely randomly.

Pair Corralation between National Bank and BetterU Education

If you would invest  0.55  in betterU Education Corp on December 24, 2024 and sell it today you would earn a total of  0.00  from holding betterU Education Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	68.33%
Values	Daily Returns

National Bank Holdings  vs.  betterU Education Corp

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 uncertain 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.

betterU Education Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days betterU Education Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, BetterU Education is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with National Bank and BetterU Education

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

The idea behind National Bank Holdings and betterU Education Corp 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.