Correlation Between Nuburu and WEG SA

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

By analyzing existing cross correlation between Nuburu Inc and WEG SA ADR, you can compare the effects of market volatilities on Nuburu and WEG SA 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 WEG SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuburu and WEG SA.

Diversification Opportunities for Nuburu and WEG SA

0.03

Correlation Coefficient

Nuburu  WEG SA

Significant diversification

The 3 months correlation between Nuburu and WEG is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Nuburu Inc and WEG SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WEG SA ADR 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 WEG SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WEG SA ADR has no effect on the direction of Nuburu i.e., Nuburu and WEG SA go up and down completely randomly.

Pair Corralation between Nuburu and WEG SA

Given the investment horizon of 90 days Nuburu Inc is expected to under-perform the WEG SA. In addition to that, Nuburu is 6.15 times more volatile than WEG SA ADR. It trades about -0.01 of its total potential returns per unit of risk. WEG SA ADR is currently generating about -0.05 per unit of volatility. If you would invest  916.00  in WEG SA ADR on December 19, 2024 and sell it today you would lose (74.00) from holding WEG SA ADR or give up 8.08% of portfolio value over 90 days.

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

Nuburu Inc  vs.  WEG SA ADR

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.

WEG SA ADR

Risk-Adjusted Performance

Very Weak

Over the last 90 days WEG SA ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Nuburu and WEG SA

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

The idea behind Nuburu Inc and WEG SA ADR 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.