Correlation Between Iofina Plc and Nanophase Technol

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

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

Diversification Opportunities for Iofina Plc and Nanophase Technol

-0.81

Correlation Coefficient

Iofina Plc  Nanophase Technol

Pay attention - limited upside

The 3 months correlation between Iofina and Nanophase is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Iofina plc and Nanophase Technol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanophase Technol and Iofina Plc 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 Iofina plc are associated (or correlated) with Nanophase Technol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanophase Technol has no effect on the direction of Iofina Plc i.e., Iofina Plc and Nanophase Technol go up and down completely randomly.

Pair Corralation between Iofina Plc and Nanophase Technol

If you would invest  24.00  in Iofina plc on August 30, 2024 and sell it today you would earn a total of  1.00  from holding Iofina plc or generate 4.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	1.59%
Values	Daily Returns

Iofina plc  vs.  Nanophase Technol

Iofina plc

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Iofina plc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Iofina Plc may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Nanophase Technol

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nanophase Technol has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Nanophase Technol is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Iofina Plc and Nanophase Technol

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

The idea behind Iofina plc and Nanophase Technol 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.