Correlation Between Nova Eye and CurveBeam

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

By analyzing existing cross correlation between Nova Eye Medical and CurveBeam AI Limited, you can compare the effects of market volatilities on Nova Eye and CurveBeam 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 Nova Eye with a short position of CurveBeam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nova Eye and CurveBeam.

Diversification Opportunities for Nova Eye and CurveBeam

0.26

Correlation Coefficient

Nova Eye  CurveBeam

Modest diversification

The 3 months correlation between Nova and CurveBeam is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Nova Eye Medical and CurveBeam AI Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CurveBeam AI Limited and Nova Eye 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 Nova Eye Medical are associated (or correlated) with CurveBeam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CurveBeam AI Limited has no effect on the direction of Nova Eye i.e., Nova Eye and CurveBeam go up and down completely randomly.

Pair Corralation between Nova Eye and CurveBeam

Assuming the 90 days trading horizon Nova Eye Medical is expected to under-perform the CurveBeam. But the stock apears to be less risky and, when comparing its historical volatility, Nova Eye Medical is 1.62 times less risky than CurveBeam. The stock trades about -0.11 of its potential returns per unit of risk. The CurveBeam AI Limited is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  11.00  in CurveBeam AI Limited on December 22, 2024 and sell it today you would earn a total of  0.00  from holding CurveBeam AI Limited or generate 0.0% return on investment over 90 days.

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

Nova Eye Medical  vs.  CurveBeam AI Limited

Nova Eye Medical

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nova Eye Medical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

CurveBeam AI Limited

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CurveBeam AI Limited are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental drivers, CurveBeam unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nova Eye and CurveBeam

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

The idea behind Nova Eye Medical and CurveBeam AI Limited 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.