Correlation Between NBI Global and NBI Unconstrained
Can any of the company-specific risk be diversified away by investing in both NBI Global and NBI Unconstrained 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 Global and NBI Unconstrained into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NBI Global Real and NBI Unconstrained Fixed, you can compare the effects of market volatilities on NBI Global and NBI Unconstrained 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 Global with a short position of NBI Unconstrained. Check out your portfolio center. Please also check ongoing floating volatility patterns of NBI Global and NBI Unconstrained.
Diversification Opportunities for NBI Global and NBI Unconstrained
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NBI and NBI is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding NBI Global Real and NBI Unconstrained Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NBI Unconstrained Fixed and NBI Global 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 Global Real are associated (or correlated) with NBI Unconstrained. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NBI Unconstrained Fixed has no effect on the direction of NBI Global i.e., NBI Global and NBI Unconstrained go up and down completely randomly.
Pair Corralation between NBI Global and NBI Unconstrained
Assuming the 90 days trading horizon NBI Global Real is expected to under-perform the NBI Unconstrained. In addition to that, NBI Global is 2.55 times more volatile than NBI Unconstrained Fixed. It trades about -0.03 of its total potential returns per unit of risk. NBI Unconstrained Fixed is currently generating about 0.04 per unit of volatility. If you would invest 2,116 in NBI Unconstrained Fixed on December 4, 2024 and sell it today you would earn a total of 16.00 from holding NBI Unconstrained Fixed or generate 0.76% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
NBI Global Real vs. NBI Unconstrained Fixed
Performance |
Timeline |
NBI Global Real |
NBI Unconstrained Fixed |
NBI Global and NBI Unconstrained Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with NBI Global and NBI Unconstrained
The main advantage of trading using opposite NBI Global and NBI Unconstrained positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NBI Global position performs unexpectedly, NBI Unconstrained 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 Unconstrained will offset losses from the drop in NBI Unconstrained's long position.NBI Global vs. NBI Active Canadian | NBI Global vs. NBI Liquid Alternatives | NBI Global vs. NBI Sustainable Canadian |
NBI Unconstrained vs. NBI High Yield | NBI Unconstrained vs. NBI Active Canadian | NBI Unconstrained vs. Picton Mahoney Fortified | NBI Unconstrained vs. NBI Liquid Alternatives |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |