Correlation Between National Bank and WESANA HEALTH

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

Diversification Opportunities for National Bank and WESANA HEALTH

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  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between National Bank and WESANA HEALTH

If you would invest  8,701  in National Bank of on October 27, 2024 and sell it today you would lose (5.00) from holding National Bank of or give up 0.06% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

National Bank of  vs.  WESANA HEALTH HOLD

 Performance 
       Timeline  
National Bank 

Risk-Adjusted Performance

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

Risk-Adjusted Performance

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

National Bank and WESANA HEALTH Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with National Bank and WESANA HEALTH

The main advantage of trading using opposite National Bank and WESANA HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Bank position performs unexpectedly, WESANA HEALTH 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 WESANA HEALTH will offset losses from the drop in WESANA HEALTH's long position.
The idea behind National Bank of and WESANA HEALTH HOLD 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.

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