Correlation Between US Financial and Nanalysis Scientific

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

By analyzing existing cross correlation between US Financial 15 and Nanalysis Scientific Corp, you can compare the effects of market volatilities on US Financial and Nanalysis Scientific 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 US Financial with a short position of Nanalysis Scientific. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Financial and Nanalysis Scientific.

Diversification Opportunities for US Financial and Nanalysis Scientific

0.13

Correlation Coefficient

US Financial  Nanalysis Scientific

Average diversification

The 3 months correlation between FTU-PB and Nanalysis is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding US Financial 15 and Nanalysis Scientific Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanalysis Scientific Corp and US Financial 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 US Financial 15 are associated (or correlated) with Nanalysis Scientific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanalysis Scientific Corp has no effect on the direction of US Financial i.e., US Financial and Nanalysis Scientific go up and down completely randomly.

Pair Corralation between US Financial and Nanalysis Scientific

Assuming the 90 days trading horizon US Financial is expected to generate 2.34 times less return on investment than Nanalysis Scientific. But when comparing it to its historical volatility, US Financial 15 is 1.95 times less risky than Nanalysis Scientific. It trades about 0.0 of its potential returns per unit of risk. Nanalysis Scientific Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  31.00  in Nanalysis Scientific Corp on December 29, 2024 and sell it today you would lose (1.00) from holding Nanalysis Scientific Corp or give up 3.23% of portfolio value over 90 days.

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

US Financial 15  vs.  Nanalysis Scientific Corp

US Financial 15

Risk-Adjusted Performance

Very Weak

Over the last 90 days US Financial 15 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, US Financial is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Nanalysis Scientific Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nanalysis Scientific Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, Nanalysis Scientific is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with US Financial and Nanalysis Scientific

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

The idea behind US Financial 15 and Nanalysis Scientific Corp 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.