Correlation Between Mace Security and Nanophase Technol

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

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

Diversification Opportunities for Mace Security and Nanophase Technol

0.0

Correlation Coefficient

Mace Security  Nanophase Technol

Pay attention - limited upside

The 3 months correlation between Mace and Nanophase is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Mace Security Intl and Nanophase Technol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanophase Technol and Mace Security 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 Mace Security Intl 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 Mace Security i.e., Mace Security and Nanophase Technol go up and down completely randomly.

Pair Corralation between Mace Security and Nanophase Technol

If you would invest (100.00) in Nanophase Technol on December 29, 2024 and sell it today you would earn a total of  100.00  from holding Nanophase Technol or generate -100.0% return on investment over 90 days.

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

Mace Security Intl  vs.  Nanophase Technol

Mace Security Intl

Risk-Adjusted Performance

Very Weak

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

Nanophase Technol

Risk-Adjusted Performance

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 Mace Security and Nanophase Technol

The main advantage of trading using opposite Mace Security and Nanophase Technol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mace Security 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 Mace Security Intl 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.

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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.