Correlation Between Grand Havana and NUZE Old

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

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

Diversification Opportunities for Grand Havana and NUZE Old

0.0

Correlation Coefficient

Grand Havana  NUZE Old

Pay attention - limited upside

The 3 months correlation between Grand and NUZE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Grand Havana and NUZE Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NUZE Old and Grand Havana 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 Grand Havana are associated (or correlated) with NUZE Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NUZE Old has no effect on the direction of Grand Havana i.e., Grand Havana and NUZE Old go up and down completely randomly.

Pair Corralation between Grand Havana and NUZE Old

If you would invest  0.05  in Grand Havana on December 27, 2024 and sell it today you would earn a total of  0.00  from holding Grand Havana or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Grand Havana  vs.  NUZE Old

Grand Havana

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Grand Havana are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Grand Havana showed solid returns over the last few months and may actually be approaching a breakup point.

NUZE Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days NUZE Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, NUZE Old is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Grand Havana and NUZE Old

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

The idea behind Grand Havana and NUZE Old 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.

Check out your portfolio center.

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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.