Correlation Between One 97 and N B

Can any of the company-specific risk be diversified away by investing in both One 97 and N B 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 One 97 and N B into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between One 97 Communications and N B I, you can compare the effects of market volatilities on One 97 and N B 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 One 97 with a short position of N B. Check out your portfolio center. Please also check ongoing floating volatility patterns of One 97 and N B.

Diversification Opportunities for One 97 and N B

0.89

Correlation Coefficient

One 97  N B

Very poor diversification

The 3 months correlation between One and NBIFIN is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding One 97 Communications and N B I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on N B I and One 97 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 One 97 Communications are associated (or correlated) with N B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of N B I has no effect on the direction of One 97 i.e., One 97 and N B go up and down completely randomly.

Pair Corralation between One 97 and N B

Assuming the 90 days trading horizon One 97 is expected to generate 2.42 times less return on investment than N B. In addition to that, One 97 is 1.45 times more volatile than N B I. It trades about 0.03 of its total potential returns per unit of risk. N B I is currently generating about 0.11 per unit of volatility. If you would invest  151,513  in N B I on September 23, 2024 and sell it today you would earn a total of  216,362  from holding N B I or generate 142.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	99.42%
Values	Daily Returns

One 97 Communications  vs.  N B I

One 97 Communications

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in One 97 Communications are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, One 97 displayed solid returns over the last few months and may actually be approaching a breakup point.

N B I

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in N B I are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady technical and fundamental indicators, N B sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with One 97 and N B

The main advantage of trading using opposite One 97 and N B positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if One 97 position performs unexpectedly, N B 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 N B will offset losses from the drop in N B's long position.

The idea behind One 97 Communications and N B I 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.