Correlation Between Intergroup and National Bank
Can any of the company-specific risk be diversified away by investing in both Intergroup 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 Intergroup and National Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Intergroup and National Bank Holdings, you can compare the effects of market volatilities on Intergroup 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 Intergroup with a short position of National Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intergroup and National Bank.
Diversification Opportunities for Intergroup and National Bank
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Intergroup and National is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding The Intergroup and National Bank Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Bank Holdings and Intergroup 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 The Intergroup 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 Holdings has no effect on the direction of Intergroup i.e., Intergroup and National Bank go up and down completely randomly.
Pair Corralation between Intergroup and National Bank
Given the investment horizon of 90 days The Intergroup is expected to under-perform the National Bank. In addition to that, Intergroup is 2.13 times more volatile than National Bank Holdings. It trades about -0.01 of its total potential returns per unit of risk. National Bank Holdings is currently generating about 0.04 per unit of volatility. If you would invest 3,140 in National Bank Holdings on January 26, 2024 and sell it today you would earn a total of 40.00 from holding National Bank Holdings or generate 1.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
The Intergroup vs. National Bank Holdings
Performance |
| Timeline |
| Intergroup |
| National Bank Holdings |
Intergroup and National Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intergroup and National Bank
The main advantage of trading using opposite Intergroup and National Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intergroup 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.| Intergroup vs. Huazhu Group | Intergroup vs. Atour Lifestyle Holdings | Intergroup vs. LuxUrban Hotels | Intergroup vs. InterContinental Hotels Group |
| National Bank vs. Superior Plus Corp | National Bank vs. Origin Agritech | National Bank vs. Identiv | National Bank vs. INTUITIVE SURGICAL |
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 Stocks Directory module to find actively traded stocks across global markets.
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