Correlation Between Natwest Group and Bank of NT
Can any of the company-specific risk be diversified away by investing in both Natwest Group and Bank of NT 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 Natwest Group and Bank of NT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Natwest Group PLC and Bank of NT, you can compare the effects of market volatilities on Natwest Group and Bank of NT 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 Natwest Group with a short position of Bank of NT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natwest Group and Bank of NT.
Diversification Opportunities for Natwest Group and Bank of NT
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Natwest and Bank is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Natwest Group PLC and Bank of NT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of NT and Natwest Group 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 Natwest Group PLC are associated (or correlated) with Bank of NT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of NT has no effect on the direction of Natwest Group i.e., Natwest Group and Bank of NT go up and down completely randomly.
Pair Corralation between Natwest Group and Bank of NT
Considering the 90-day investment horizon Natwest Group PLC is expected to generate 1.48 times more return on investment than Bank of NT. However, Natwest Group is 1.48 times more volatile than Bank of NT. It trades about 0.13 of its potential returns per unit of risk. Bank of NT is currently generating about 0.14 per unit of risk. If you would invest 1,189 in Natwest Group PLC on March 17, 2025 and sell it today you would earn a total of 211.00 from holding Natwest Group PLC or generate 17.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Natwest Group PLC vs. Bank of NT
Performance |
| Timeline |
| Natwest Group PLC |
| Bank of NT |
Natwest Group and Bank of NT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Natwest Group and Bank of NT
The main advantage of trading using opposite Natwest Group and Bank of NT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natwest Group position performs unexpectedly, Bank of NT 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 Bank of NT will offset losses from the drop in Bank of NT's long position.| Natwest Group vs. ING Group NV | Natwest Group vs. HSBC Holdings PLC | Natwest Group vs. Banco Santander SA | Natwest Group vs. UBS Group AG |
| Bank of NT vs. PJT Partners | Bank of NT vs. National Bank Holdings | Bank of NT vs. FB Financial Corp | Bank of NT vs. Northrim BanCorp |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |