Correlation Between National Bank and Cargojet
Can any of the company-specific risk be diversified away by investing in both National Bank and Cargojet 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 Cargojet 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 Cargojet, you can compare the effects of market volatilities on National Bank and Cargojet 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 Cargojet. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Bank and Cargojet.
Diversification Opportunities for National Bank and Cargojet
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between National and Cargojet is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding National Bank of and Cargojet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cargojet 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 Cargojet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cargojet has no effect on the direction of National Bank i.e., National Bank and Cargojet go up and down completely randomly.
Pair Corralation between National Bank and Cargojet
Assuming the 90 days horizon National Bank of is expected to generate 0.27 times more return on investment than Cargojet. However, National Bank of is 3.77 times less risky than Cargojet. It trades about 0.37 of its potential returns per unit of risk. Cargojet is currently generating about -0.14 per unit of risk. If you would invest 14,229 in National Bank of on August 28, 2025 and sell it today you would earn a total of 2,320 from holding National Bank of or generate 16.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Bank of vs. Cargojet
Performance |
| Timeline |
| National Bank |
| Cargojet |
National Bank and Cargojet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Bank and Cargojet
The main advantage of trading using opposite National Bank and Cargojet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Bank position performs unexpectedly, Cargojet 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 Cargojet will offset losses from the drop in Cargojet's long position.| National Bank vs. Plaza Retail REIT | National Bank vs. Northstar Clean Technologies | National Bank vs. Income Financial Trust | National Bank vs. Bausch Health Companies |
| Cargojet vs. Economic Investment Trust | Cargojet vs. Data Communications Management | Cargojet vs. Canadian General Investments | Cargojet vs. Carespan Health |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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