Correlation Between National Bank and EL D

Can any of the company-specific risk be diversified away by investing in both National Bank and EL D 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 EL D 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 EL D Mouzakis, you can compare the effects of market volatilities on National Bank and EL D 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 EL D. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Bank and EL D.

Diversification Opportunities for National Bank and EL D

-0.28

Correlation Coefficient

National Bank  EL D

Very good diversification

The 3 months correlation between National and MOYZK is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding National Bank of and EL D Mouzakis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EL D Mouzakis 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 EL D. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EL D Mouzakis has no effect on the direction of National Bank i.e., National Bank and EL D go up and down completely randomly.

Pair Corralation between National Bank and EL D

Assuming the 90 days trading horizon National Bank of is expected to under-perform the EL D. But the stock apears to be less risky and, when comparing its historical volatility, National Bank of is 2.32 times less risky than EL D. The stock trades about -0.01 of its potential returns per unit of risk. The EL D Mouzakis is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  62.00  in EL D Mouzakis on June 29, 2024 and sell it today you would earn a total of  11.00  from holding EL D Mouzakis or generate 17.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.65%
Values	Daily Returns

National Bank of  vs.  EL D Mouzakis

National Bank

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in National Bank of are ranked lower than 2 (%) 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.

EL D Mouzakis

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in EL D Mouzakis are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, EL D is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with National Bank and EL D

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

The idea behind National Bank of and EL D Mouzakis 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..