Correlation Between Multi Asset and NESNVX

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

By analyzing existing cross correlation between Multi Asset Real Return and NESNVX 47 15 JAN 53, you can compare the effects of market volatilities on Multi Asset and NESNVX 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 Multi Asset with a short position of NESNVX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Asset and NESNVX.

Diversification Opportunities for Multi Asset and NESNVX

-0.67

Correlation Coefficient

Multi Asset  NESNVX

Excellent diversification

The 3 months correlation between Multi and NESNVX is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Multi Asset Real Return and NESNVX 47 15 JAN 53 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NESNVX 47 15 and Multi Asset 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 Multi Asset Real Return are associated (or correlated) with NESNVX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NESNVX 47 15 has no effect on the direction of Multi Asset i.e., Multi Asset and NESNVX go up and down completely randomly.

Pair Corralation between Multi Asset and NESNVX

Assuming the 90 days horizon Multi Asset is expected to generate 1.01 times less return on investment than NESNVX. But when comparing it to its historical volatility, Multi Asset Real Return is 1.85 times less risky than NESNVX. It trades about 0.1 of its potential returns per unit of risk. NESNVX 47 15 JAN 53 is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  9,750  in NESNVX 47 15 JAN 53 on September 25, 2024 and sell it today you would earn a total of  429.00  from holding NESNVX 47 15 JAN 53 or generate 4.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	64.06%
Values	Daily Returns

Multi Asset Real Return  vs.  NESNVX 47 15 JAN 53

Multi Asset Real

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Multi Asset Real Return are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Multi Asset may actually be approaching a critical reversion point that can send shares even higher in January 2025.

NESNVX 47 15

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in NESNVX 47 15 JAN 53 are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, NESNVX may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Multi Asset and NESNVX

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

The idea behind Multi Asset Real Return and NESNVX 47 15 JAN 53 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.