Correlation Between NamSys and Computer Modelling

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

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

Diversification Opportunities for NamSys and Computer Modelling

-0.1

Correlation Coefficient

NamSys  Computer Modelling

Good diversification

The 3 months correlation between NamSys and Computer is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding NamSys Inc and Computer Modelling Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Computer Modelling and NamSys 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 NamSys Inc are associated (or correlated) with Computer Modelling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Computer Modelling has no effect on the direction of NamSys i.e., NamSys and Computer Modelling go up and down completely randomly.

Pair Corralation between NamSys and Computer Modelling

Assuming the 90 days horizon NamSys Inc is expected to generate 1.19 times more return on investment than Computer Modelling. However, NamSys is 1.19 times more volatile than Computer Modelling Group. It trades about 0.06 of its potential returns per unit of risk. Computer Modelling Group is currently generating about 0.07 per unit of risk. If you would invest  65.00  in NamSys Inc on September 26, 2024 and sell it today you would earn a total of  60.00  from holding NamSys Inc or generate 92.31% return on investment over 90 days.

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

NamSys Inc  vs.  Computer Modelling Group

NamSys Inc

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in NamSys Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, NamSys may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Computer Modelling

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with NamSys and Computer Modelling

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

The idea behind NamSys Inc and Computer Modelling Group 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.