Correlation Between SPACE and NOVA VISION

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

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

Diversification Opportunities for SPACE and NOVA VISION

0.48

Correlation Coefficient

SPACE  NOVA VISION

Very weak diversification

The 3 months correlation between SPACE and NOVA is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding SPACE and NOVA VISION ACQUISITION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NOVA VISION ACQUISITION and SPACE 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 SPACE are associated (or correlated) with NOVA VISION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NOVA VISION ACQUISITION has no effect on the direction of SPACE i.e., SPACE and NOVA VISION go up and down completely randomly.

Pair Corralation between SPACE and NOVA VISION

Assuming the 90 days horizon SPACE is expected to generate 17.57 times more return on investment than NOVA VISION. However, SPACE is 17.57 times more volatile than NOVA VISION ACQUISITION. It trades about 0.18 of its potential returns per unit of risk. NOVA VISION ACQUISITION is currently generating about 0.03 per unit of risk. If you would invest  0.00  in SPACE on October 11, 2024 and sell it today you would earn a total of  44.00  from holding SPACE or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	64.68%
Values	Daily Returns

SPACE  vs.  NOVA VISION ACQUISITION

SPACE

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SPACE are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, SPACE exhibited solid returns over the last few months and may actually be approaching a breakup point.

NOVA VISION ACQUISITION

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NOVA VISION ACQUISITION has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with SPACE and NOVA VISION

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

The idea behind SPACE and NOVA VISION ACQUISITION 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.