Correlation Between Carters and NESNVX

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

By analyzing existing cross correlation between Carters and NESNVX 25 14 SEP 41, you can compare the effects of market volatilities on Carters 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 Carters with a short position of NESNVX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carters and NESNVX.

Diversification Opportunities for Carters and NESNVX

-0.16

Correlation Coefficient

Carters  NESNVX

Good diversification

The 3 months correlation between Carters and NESNVX is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Carters and NESNVX 25 14 SEP 41 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NESNVX 25 14 and Carters 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 Carters 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 25 14 has no effect on the direction of Carters i.e., Carters and NESNVX go up and down completely randomly.

Pair Corralation between Carters and NESNVX

Considering the 90-day investment horizon Carters is expected to generate 1.04 times more return on investment than NESNVX. However, Carters is 1.04 times more volatile than NESNVX 25 14 SEP 41. It trades about -0.1 of its potential returns per unit of risk. NESNVX 25 14 SEP 41 is currently generating about -0.31 per unit of risk. If you would invest  5,632  in Carters on October 4, 2024 and sell it today you would lose (213.00) from holding Carters or give up 3.78% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	33.33%
Values	Daily Returns

Carters  vs.  NESNVX 25 14 SEP 41

Carters

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Carters has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

NESNVX 25 14

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NESNVX 25 14 SEP 41 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for NESNVX 25 14 SEP 41 investors.

Pair Trading with Carters and NESNVX

The main advantage of trading using opposite Carters and NESNVX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carters 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 Carters and NESNVX 25 14 SEP 41 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.