Correlation Between Banco Comercial and NOS SGPS

Can any of the company-specific risk be diversified away by investing in both Banco Comercial and NOS SGPS 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 Banco Comercial and NOS SGPS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Banco Comercial Portugues and NOS SGPS SA, you can compare the effects of market volatilities on Banco Comercial and NOS SGPS 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 Banco Comercial with a short position of NOS SGPS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Comercial and NOS SGPS.

Diversification Opportunities for Banco Comercial and NOS SGPS

-0.31

Correlation Coefficient

Banco Comercial  NOS SGPS

Very good diversification

The 3 months correlation between Banco and NOS is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Banco Comercial Portugues and NOS SGPS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NOS SGPS SA and Banco Comercial 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 Banco Comercial Portugues are associated (or correlated) with NOS SGPS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NOS SGPS SA has no effect on the direction of Banco Comercial i.e., Banco Comercial and NOS SGPS go up and down completely randomly.

Pair Corralation between Banco Comercial and NOS SGPS

Assuming the 90 days trading horizon Banco Comercial Portugues is expected to generate 1.5 times more return on investment than NOS SGPS. However, Banco Comercial is 1.5 times more volatile than NOS SGPS SA. It trades about 0.21 of its potential returns per unit of risk. NOS SGPS SA is currently generating about 0.03 per unit of risk. If you would invest  60.00  in Banco Comercial Portugues on May 16, 2025 and sell it today you would earn a total of  16.00  from holding Banco Comercial Portugues or generate 26.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Banco Comercial Portugues  vs.  NOS SGPS SA

Banco Comercial Portugues

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Banco Comercial Portugues are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Banco Comercial unveiled solid returns over the last few months and may actually be approaching a breakup point.

NOS SGPS SA

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in NOS SGPS SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, NOS SGPS is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Banco Comercial and NOS SGPS

The main advantage of trading using opposite Banco Comercial and NOS SGPS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Comercial position performs unexpectedly, NOS SGPS 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 NOS SGPS will offset losses from the drop in NOS SGPS's long position.

The idea behind Banco Comercial Portugues and NOS SGPS SA 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.

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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.