Correlation Between LAMDA Development and National Bank

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

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

Diversification Opportunities for LAMDA Development and National Bank

-0.3

Correlation Coefficient

LAMDA Development  National Bank

Very good diversification

The 3 months correlation between LAMDA and National is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding LAMDA Development SA and National Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Bank and LAMDA Development 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 LAMDA Development SA 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 has no effect on the direction of LAMDA Development i.e., LAMDA Development and National Bank go up and down completely randomly.

Pair Corralation between LAMDA Development and National Bank

Assuming the 90 days trading horizon LAMDA Development SA is expected to under-perform the National Bank. But the stock apears to be less risky and, when comparing its historical volatility, LAMDA Development SA is 1.55 times less risky than National Bank. The stock trades about 0.0 of its potential returns per unit of risk. The National Bank of is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest  910.00  in National Bank of on April 25, 2025 and sell it today you would earn a total of  308.00  from holding National Bank of or generate 33.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

LAMDA Development SA  vs.  National Bank of

LAMDA Development

Risk-Adjusted Performance

Very Weak

Over the last 90 days LAMDA Development SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, LAMDA Development is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

National Bank

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in National Bank of are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, National Bank unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with LAMDA Development and National Bank

The main advantage of trading using opposite LAMDA Development and National Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LAMDA Development 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.

The idea behind LAMDA Development SA and National Bank of 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.