Correlation Between Nuburu and Smith AO

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

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

Diversification Opportunities for Nuburu and Smith AO

0.31

Correlation Coefficient

Nuburu  Smith AO

Weak diversification

The 3 months correlation between Nuburu and Smith is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Nuburu Inc and Smith AO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smith AO and Nuburu 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 Nuburu Inc are associated (or correlated) with Smith AO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smith AO has no effect on the direction of Nuburu i.e., Nuburu and Smith AO go up and down completely randomly.

Pair Corralation between Nuburu and Smith AO

Given the investment horizon of 90 days Nuburu Inc is expected to under-perform the Smith AO. In addition to that, Nuburu is 10.53 times more volatile than Smith AO. It trades about -0.01 of its total potential returns per unit of risk. Smith AO is currently generating about 0.0 per unit of volatility. If you would invest  6,809  in Smith AO on December 19, 2024 and sell it today you would lose (43.00) from holding Smith AO or give up 0.63% of portfolio value over 90 days.

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

Nuburu Inc  vs.  Smith AO

Nuburu Inc

Risk-Adjusted Performance

Weak

Over the last 90 days Nuburu Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Smith AO

Risk-Adjusted Performance

Very Weak

Over the last 90 days Smith AO has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Smith AO is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Nuburu and Smith AO

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

The idea behind Nuburu Inc and Smith AO 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.