Correlation Between National Bank and Arab Moltaka

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

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

Diversification Opportunities for National Bank and Arab Moltaka

0.0

Correlation Coefficient

National Bank  Arab Moltaka

Pay attention - limited upside

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

Pair Corralation between National Bank and Arab Moltaka

If you would invest  1,300  in National Bank on October 9, 2024 and sell it today you would earn a total of  0.00  from holding National Bank or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

National Bank  vs.  Arab Moltaka Investments

National Bank

Risk-Adjusted Performance

0 of 100

Very Weak

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

Arab Moltaka Investments

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Arab Moltaka Investments are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Arab Moltaka may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with National Bank and Arab Moltaka

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

The idea behind National Bank and Arab Moltaka Investments 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.

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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.