Correlation Between 2020 Bulkers and Nekkar Asa

Can any of the company-specific risk be diversified away by investing in both 2020 Bulkers and Nekkar Asa 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 2020 Bulkers and Nekkar Asa into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 2020 Bulkers and Nekkar Asa, you can compare the effects of market volatilities on 2020 Bulkers and Nekkar Asa 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 2020 Bulkers with a short position of Nekkar Asa. Check out your portfolio center. Please also check ongoing floating volatility patterns of 2020 Bulkers and Nekkar Asa.

Diversification Opportunities for 2020 Bulkers and Nekkar Asa

-0.36

Correlation Coefficient

2020 Bulkers  Nekkar Asa

Very good diversification

The 3 months correlation between 2020 and Nekkar is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding 2020 Bulkers and Nekkar Asa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nekkar Asa and 2020 Bulkers 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 2020 Bulkers are associated (or correlated) with Nekkar Asa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nekkar Asa has no effect on the direction of 2020 Bulkers i.e., 2020 Bulkers and Nekkar Asa go up and down completely randomly.

Pair Corralation between 2020 Bulkers and Nekkar Asa

Assuming the 90 days trading horizon 2020 Bulkers is expected to under-perform the Nekkar Asa. But the stock apears to be less risky and, when comparing its historical volatility, 2020 Bulkers is 1.06 times less risky than Nekkar Asa. The stock trades about -0.08 of its potential returns per unit of risk. The Nekkar Asa is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  1,025  in Nekkar Asa on September 4, 2024 and sell it today you would lose (45.00) from holding Nekkar Asa or give up 4.39% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

2020 Bulkers  vs.  Nekkar Asa

2020 Bulkers

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 2020 Bulkers has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's essential indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Nekkar Asa

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nekkar Asa has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Nekkar Asa is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with 2020 Bulkers and Nekkar Asa

The main advantage of trading using opposite 2020 Bulkers and Nekkar Asa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 2020 Bulkers position performs unexpectedly, Nekkar Asa 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 Nekkar Asa will offset losses from the drop in Nekkar Asa's long position.

The idea behind 2020 Bulkers and Nekkar Asa 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.