Correlation Between Nable Communications and Kg Chemical

Can any of the company-specific risk be diversified away by investing in both Nable Communications and Kg Chemical 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 Nable Communications and Kg Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nable Communications and Kg Chemical, you can compare the effects of market volatilities on Nable Communications and Kg Chemical 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 Nable Communications with a short position of Kg Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nable Communications and Kg Chemical.

Diversification Opportunities for Nable Communications and Kg Chemical

-0.42

Correlation Coefficient

Nable Communications  Kg Chemical

Very good diversification

The 3 months correlation between Nable and 001390 is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Nable Communications and Kg Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kg Chemical and Nable Communications 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 Nable Communications are associated (or correlated) with Kg Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kg Chemical has no effect on the direction of Nable Communications i.e., Nable Communications and Kg Chemical go up and down completely randomly.

Pair Corralation between Nable Communications and Kg Chemical

Assuming the 90 days trading horizon Nable Communications is expected to generate 0.44 times more return on investment than Kg Chemical. However, Nable Communications is 2.29 times less risky than Kg Chemical. It trades about -0.03 of its potential returns per unit of risk. Kg Chemical is currently generating about -0.05 per unit of risk. If you would invest  801,000  in Nable Communications on October 22, 2024 and sell it today you would lose (141,000) from holding Nable Communications or give up 17.6% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.47%
Values	Daily Returns

Nable Communications  vs.  Kg Chemical

Nable Communications

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nable Communications are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Nable Communications is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Kg Chemical

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kg Chemical are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Kg Chemical is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Nable Communications and Kg Chemical

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

The idea behind Nable Communications and Kg Chemical 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.