Correlation Between Azure Holding and Novation Hldgs

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

By analyzing existing cross correlation between Azure Holding Group and Novation Hldgs, you can compare the effects of market volatilities on Azure Holding and Novation Hldgs 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 Azure Holding with a short position of Novation Hldgs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Azure Holding and Novation Hldgs.

Diversification Opportunities for Azure Holding and Novation Hldgs

0.0

Correlation Coefficient

Azure Holding  Novation Hldgs

Pay attention - limited upside

The 3 months correlation between Azure and Novation is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Azure Holding Group and Novation Hldgs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Novation Hldgs and Azure Holding 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 Azure Holding Group are associated (or correlated) with Novation Hldgs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Novation Hldgs has no effect on the direction of Azure Holding i.e., Azure Holding and Novation Hldgs go up and down completely randomly.

Pair Corralation between Azure Holding and Novation Hldgs

If you would invest  3.50  in Azure Holding Group on September 18, 2024 and sell it today you would earn a total of  8.50  from holding Azure Holding Group or generate 242.86% return on investment over 90 days.

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

Azure Holding Group  vs.  Novation Hldgs

Azure Holding Group

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Azure Holding Group are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, Azure Holding demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Novation Hldgs

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Novation Hldgs has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical indicators, Novation Hldgs is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Azure Holding and Novation Hldgs

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

The idea behind Azure Holding Group and Novation Hldgs 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.