Correlation Between Vogiatzoglou Systems and National Bank

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

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

Diversification Opportunities for Vogiatzoglou Systems and National Bank

0.45

Correlation Coefficient

Vogiatzoglou Systems  National Bank

Very weak diversification

The 3 months correlation between Vogiatzoglou and National is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Vogiatzoglou Systems 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 Vogiatzoglou Systems 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 Vogiatzoglou Systems 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 Vogiatzoglou Systems i.e., Vogiatzoglou Systems and National Bank go up and down completely randomly.

Pair Corralation between Vogiatzoglou Systems and National Bank

Assuming the 90 days trading horizon Vogiatzoglou Systems is expected to generate 3.01 times less return on investment than National Bank. In addition to that, Vogiatzoglou Systems is 1.14 times more volatile than National Bank of. It trades about 0.03 of its total potential returns per unit of risk. National Bank of is currently generating about 0.09 per unit of volatility. If you would invest  352.00  in National Bank of on October 9, 2024 and sell it today you would earn a total of  424.00  from holding National Bank of or generate 120.45% return on investment over 90 days.

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

Vogiatzoglou Systems SA  vs.  National Bank of

Vogiatzoglou Systems

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Vogiatzoglou Systems SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Vogiatzoglou Systems is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

National Bank

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in National Bank of are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. 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 Vogiatzoglou Systems and National Bank

The main advantage of trading using opposite Vogiatzoglou Systems and National Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vogiatzoglou Systems 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 Vogiatzoglou Systems 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.