Correlation Between National Bank and Exro Technologies

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

Diversification Opportunities for National Bank and Exro Technologies

-0.76
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between National and Exro is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding National Bank of and Exro Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exro Technologies 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 Exro Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exro Technologies has no effect on the direction of National Bank i.e., National Bank and Exro Technologies go up and down completely randomly.

Pair Corralation between National Bank and Exro Technologies

Assuming the 90 days horizon National Bank of is expected to generate 0.1 times more return on investment than Exro Technologies. However, National Bank of is 10.1 times less risky than Exro Technologies. It trades about 0.46 of its potential returns per unit of risk. Exro Technologies is currently generating about -0.12 per unit of risk. If you would invest  11,748  in National Bank of on April 24, 2025 and sell it today you would earn a total of  2,532  from holding National Bank of or generate 21.55% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy98.41%
ValuesDaily Returns

National Bank of  vs.  Exro Technologies

 Performance 
       Timeline  
National Bank 

Risk-Adjusted Performance

Very Strong

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in National Bank of are ranked lower than 36 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, National Bank displayed solid returns over the last few months and may actually be approaching a breakup point.
Exro Technologies 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Exro Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in August 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

National Bank and Exro Technologies Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with National Bank and Exro Technologies

The main advantage of trading using opposite National Bank and Exro Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Bank position performs unexpectedly, Exro Technologies 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 Exro Technologies will offset losses from the drop in Exro Technologies' long position.
The idea behind National Bank of and Exro Technologies 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.

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