Correlation Between National Bank and GALENA MINING

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

Diversification Opportunities for National Bank and GALENA MINING

0.0

Correlation Coefficient

National Bank  GALENA MINING

Pay attention - limited upside

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

Pair Corralation between National Bank and GALENA MINING

If you would invest  3,597  in National Bank Holdings on September 12, 2024 and sell it today you would earn a total of  783.00  from holding National Bank Holdings or generate 21.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

National Bank Holdings  vs.  GALENA MINING LTD

National Bank Holdings

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in National Bank Holdings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, National Bank reported solid returns over the last few months and may actually be approaching a breakup point.

GALENA MINING LTD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GALENA MINING LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, GALENA MINING is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with National Bank and GALENA MINING

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

The idea behind National Bank Holdings and GALENA MINING LTD 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.