Correlation Between CBH and NXG NextGen

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

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

Diversification Opportunities for CBH and NXG NextGen

0.0

Correlation Coefficient

CBH  NXG NextGen

Pay attention - limited upside

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

Pair Corralation between CBH and NXG NextGen

If you would invest (100.00) in CBH on November 28, 2024 and sell it today you would earn a total of  100.00  from holding CBH or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

CBH  vs.  NXG NextGen Infrastructure

CBH

Risk-Adjusted Performance

Very Weak

Over the last 90 days CBH has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental drivers, CBH is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

NXG NextGen Infrastr

Risk-Adjusted Performance

Very Weak

Over the last 90 days NXG NextGen Infrastructure has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with CBH and NXG NextGen

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

The idea behind CBH and NXG NextGen Infrastructure 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.