Correlation Between National Bank and Leroy Seafood

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

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

Diversification Opportunities for National Bank and Leroy Seafood

0.0

Correlation Coefficient

National Bank  Leroy Seafood

Pay attention - limited upside

The 3 months correlation between National and Leroy is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding National Bank of and Leroy Seafood Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leroy Seafood Group and National Bank 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 National Bank of are associated (or correlated) with Leroy Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leroy Seafood Group has no effect on the direction of National Bank i.e., National Bank and Leroy Seafood go up and down completely randomly.

Pair Corralation between National Bank and Leroy Seafood

Assuming the 90 days trading horizon National Bank is expected to generate 1.78 times less return on investment than Leroy Seafood. But when comparing it to its historical volatility, National Bank of is 1.84 times less risky than Leroy Seafood. It trades about 0.06 of its potential returns per unit of risk. Leroy Seafood Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  3,903  in Leroy Seafood Group on September 20, 2024 and sell it today you would earn a total of  1,026  from holding Leroy Seafood Group or generate 26.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

National Bank of  vs.  Leroy Seafood Group

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 basic indicators, National Bank is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Leroy Seafood Group

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Leroy Seafood Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Leroy Seafood is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with National Bank and Leroy Seafood

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

The idea behind National Bank of and Leroy Seafood Group 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.