Correlation Between Loctek Ergonomic and Nuode Investment

Can any of the company-specific risk be diversified away by investing in both Loctek Ergonomic and Nuode Investment 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 Loctek Ergonomic and Nuode Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Loctek Ergonomic Technology and Nuode Investment Co, you can compare the effects of market volatilities on Loctek Ergonomic and Nuode Investment 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 Loctek Ergonomic with a short position of Nuode Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loctek Ergonomic and Nuode Investment.

Diversification Opportunities for Loctek Ergonomic and Nuode Investment

0.9

Correlation Coefficient

Loctek Ergonomic  Nuode Investment

Almost no diversification

The 3 months correlation between Loctek and Nuode is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Loctek Ergonomic Technology and Nuode Investment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuode Investment and Loctek Ergonomic 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 Loctek Ergonomic Technology are associated (or correlated) with Nuode Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuode Investment has no effect on the direction of Loctek Ergonomic i.e., Loctek Ergonomic and Nuode Investment go up and down completely randomly.

Pair Corralation between Loctek Ergonomic and Nuode Investment

Assuming the 90 days trading horizon Loctek Ergonomic Technology is expected to generate 0.82 times more return on investment than Nuode Investment. However, Loctek Ergonomic Technology is 1.23 times less risky than Nuode Investment. It trades about 0.06 of its potential returns per unit of risk. Nuode Investment Co is currently generating about -0.02 per unit of risk. If you would invest  1,670  in Loctek Ergonomic Technology on September 13, 2024 and sell it today you would earn a total of  44.00  from holding Loctek Ergonomic Technology or generate 2.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Loctek Ergonomic Technology  vs.  Nuode Investment Co

Loctek Ergonomic Tec

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Loctek Ergonomic Technology are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Loctek Ergonomic sustained solid returns over the last few months and may actually be approaching a breakup point.

Nuode Investment

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Nuode Investment Co are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Nuode Investment sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Loctek Ergonomic and Nuode Investment

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

The idea behind Loctek Ergonomic Technology and Nuode Investment Co 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.