Correlation Between Nexters Warrant and SohuCom

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

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

Diversification Opportunities for Nexters Warrant and SohuCom

0.32

Correlation Coefficient

Nexters Warrant  SohuCom

Weak diversification

The 3 months correlation between Nexters and SohuCom is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Nexters Warrant and SohuCom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SohuCom and Nexters Warrant 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 Nexters Warrant are associated (or correlated) with SohuCom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SohuCom has no effect on the direction of Nexters Warrant i.e., Nexters Warrant and SohuCom go up and down completely randomly.

Pair Corralation between Nexters Warrant and SohuCom

Assuming the 90 days horizon Nexters Warrant is expected to generate 100.23 times more return on investment than SohuCom. However, Nexters Warrant is 100.23 times more volatile than SohuCom. It trades about 0.21 of its potential returns per unit of risk. SohuCom is currently generating about 0.01 per unit of risk. If you would invest  5.94  in Nexters Warrant on September 30, 2024 and sell it today you would lose (4.14) from holding Nexters Warrant or give up 69.7% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	43.65%
Values	Daily Returns

Nexters Warrant  vs.  SohuCom

Nexters Warrant

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nexters Warrant 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 basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

SohuCom

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SohuCom has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's technical indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Nexters Warrant and SohuCom

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

The idea behind Nexters Warrant and SohuCom 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.