Correlation Between NBI Active and NBI Canadian
Can any of the company-specific risk be diversified away by investing in both NBI Active and NBI Canadian 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 NBI Active and NBI Canadian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NBI Active Canadian and NBI Canadian Dividend, you can compare the effects of market volatilities on NBI Active and NBI Canadian 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 NBI Active with a short position of NBI Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of NBI Active and NBI Canadian.
Diversification Opportunities for NBI Active and NBI Canadian
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NBI and NBI is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding NBI Active Canadian and NBI Canadian Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NBI Canadian Dividend and NBI Active 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 NBI Active Canadian are associated (or correlated) with NBI Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NBI Canadian Dividend has no effect on the direction of NBI Active i.e., NBI Active and NBI Canadian go up and down completely randomly.
Pair Corralation between NBI Active and NBI Canadian
Assuming the 90 days trading horizon NBI Active Canadian is expected to generate 0.55 times more return on investment than NBI Canadian. However, NBI Active Canadian is 1.83 times less risky than NBI Canadian. It trades about 0.34 of its potential returns per unit of risk. NBI Canadian Dividend is currently generating about 0.03 per unit of risk. If you would invest 2,337 in NBI Active Canadian on December 4, 2024 and sell it today you would earn a total of 122.00 from holding NBI Active Canadian or generate 5.22% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
NBI Active Canadian vs. NBI Canadian Dividend
Performance |
Timeline |
NBI Active Canadian |
NBI Canadian Dividend |
NBI Active and NBI Canadian Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with NBI Active and NBI Canadian
The main advantage of trading using opposite NBI Active and NBI Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NBI Active position performs unexpectedly, NBI Canadian 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 NBI Canadian will offset losses from the drop in NBI Canadian's long position.NBI Active vs. TD Active Preferred | NBI Active vs. RBC Canadian Preferred | NBI Active vs. Dynamic Active Preferred | NBI Active vs. NBI Global Real |
NBI Canadian vs. NBI High Yield | NBI Canadian vs. NBI Unconstrained Fixed | NBI Canadian vs. NBI Global Real | NBI Canadian vs. NBI Active Canadian |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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