Correlation Between NCC and City Union

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

By analyzing existing cross correlation between NCC Limited and City Union Bank, you can compare the effects of market volatilities on NCC and City Union 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 NCC with a short position of City Union. Check out your portfolio center. Please also check ongoing floating volatility patterns of NCC and City Union.

Diversification Opportunities for NCC and City Union

0.0

Correlation Coefficient

NCC  City Union

Pay attention - limited upside

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

Pair Corralation between NCC and City Union

If you would invest  0.00  in NCC Limited on October 24, 2024 and sell it today you would earn a total of  0.00  from holding NCC Limited or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

NCC Limited  vs.  City Union Bank

NCC Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NCC Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, NCC is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

City Union Bank

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in City Union Bank are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, City Union is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with NCC and City Union

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

The idea behind NCC Limited and City Union Bank 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.