Correlation Between NBI Sustainable and NBI Canadian
Can any of the company-specific risk be diversified away by investing in both NBI Sustainable 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 Sustainable 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 Sustainable Global and NBI Canadian Dividend, you can compare the effects of market volatilities on NBI Sustainable 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 Sustainable with a short position of NBI Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of NBI Sustainable and NBI Canadian.
Diversification Opportunities for NBI Sustainable and NBI Canadian
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NBI and NBI is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding NBI Sustainable Global 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 Sustainable 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 Sustainable Global 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 Sustainable i.e., NBI Sustainable and NBI Canadian go up and down completely randomly.
Pair Corralation between NBI Sustainable and NBI Canadian
Assuming the 90 days trading horizon NBI Sustainable Global is expected to under-perform the NBI Canadian. In addition to that, NBI Sustainable is 2.85 times more volatile than NBI Canadian Dividend. It trades about -0.08 of its total potential returns per unit of risk. NBI Canadian Dividend is currently generating about 0.1 per unit of volatility. If you would invest 3,312 in NBI Canadian Dividend on December 28, 2024 and sell it today you would earn a total of 77.00 from holding NBI Canadian Dividend or generate 2.32% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
NBI Sustainable Global vs. NBI Canadian Dividend
Performance |
Timeline |
NBI Sustainable Global |
NBI Canadian Dividend |
NBI Sustainable and NBI Canadian Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with NBI Sustainable and NBI Canadian
The main advantage of trading using opposite NBI Sustainable and NBI Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NBI Sustainable 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 Sustainable vs. NBI High Yield | NBI Sustainable vs. NBI Unconstrained Fixed | NBI Sustainable vs. NBI Global Real | NBI Sustainable vs. NBI Active Canadian |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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