Correlation Between Gr Sarantis and National Bank

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

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

Diversification Opportunities for Gr Sarantis and National Bank

0.25

Correlation Coefficient

Gr Sarantis  National Bank

Modest diversification

The 3 months correlation between SAR and National is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Gr Sarantis SA and National Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Bank and Gr Sarantis 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 Gr Sarantis SA are associated (or correlated) with National Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Bank has no effect on the direction of Gr Sarantis i.e., Gr Sarantis and National Bank go up and down completely randomly.

Pair Corralation between Gr Sarantis and National Bank

Assuming the 90 days trading horizon Gr Sarantis SA is expected to generate 0.61 times more return on investment than National Bank. However, Gr Sarantis SA is 1.63 times less risky than National Bank. It trades about -0.03 of its potential returns per unit of risk. National Bank of is currently generating about -0.05 per unit of risk. If you would invest  1,088  in Gr Sarantis SA on September 5, 2024 and sell it today you would lose (24.00) from holding Gr Sarantis SA or give up 2.21% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Gr Sarantis SA  vs.  National Bank of

Gr Sarantis SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gr Sarantis SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Gr Sarantis is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

National Bank

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days National Bank of has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, National Bank is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Gr Sarantis and National Bank

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

The idea behind Gr Sarantis SA and National Bank of 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.

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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.