Correlation Between Monolithic Power and Nano Labs

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Monolithic Power and Nano Labs 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 Monolithic Power and Nano Labs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Monolithic Power Systems and Nano Labs, you can compare the effects of market volatilities on Monolithic Power and Nano Labs 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 Monolithic Power with a short position of Nano Labs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monolithic Power and Nano Labs.

Diversification Opportunities for Monolithic Power and Nano Labs

MonolithicNanoDiversified AwayMonolithicNanoDiversified Away100%
-0.22
  Correlation Coefficient

Very good diversification

The 3 months correlation between Monolithic and Nano is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Monolithic Power Systems and Nano Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nano Labs and Monolithic Power 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 Monolithic Power Systems are associated (or correlated) with Nano Labs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nano Labs has no effect on the direction of Monolithic Power i.e., Monolithic Power and Nano Labs go up and down completely randomly.

Pair Corralation between Monolithic Power and Nano Labs

Given the investment horizon of 90 days Monolithic Power is expected to generate 7.36 times less return on investment than Nano Labs. But when comparing it to its historical volatility, Monolithic Power Systems is 4.41 times less risky than Nano Labs. It trades about 0.03 of its potential returns per unit of risk. Nano Labs is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,380  in Nano Labs on September 23, 2024 and sell it today you would lose (508.00) from holding Nano Labs or give up 36.81% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Monolithic Power Systems  vs.  Nano Labs

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec 050100150200250300
JavaScript chart by amCharts 3.21.15MPWR NA
       Timeline  
Monolithic Power Systems 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Monolithic Power Systems has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec550600650700750800850900950
Nano Labs 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Nano Labs are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Nano Labs sustained solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec468101214

Monolithic Power and Nano Labs Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-6.33-4.74-3.15-1.56-0.02271.322.684.025.386.74 0.0050.0100.0150.0200.0250.030
JavaScript chart by amCharts 3.21.15MPWR NA
       Returns  

Pair Trading with Monolithic Power and Nano Labs

The main advantage of trading using opposite Monolithic Power and Nano Labs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monolithic Power position performs unexpectedly, Nano Labs 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 Nano Labs will offset losses from the drop in Nano Labs' long position.
The idea behind Monolithic Power Systems and Nano Labs 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.

Other Complementary Tools

Portfolio Diagnostics
Use generated alerts and portfolio events aggregator to diagnose current holdings
Bollinger Bands
Use Bollinger Bands indicator to analyze target price for a given investing horizon
Crypto Correlations
Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins
Volatility Analysis
Get historical volatility and risk analysis based on latest market data
Stock Screener
Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook.