Correlation Between Multistack International and Nuvve Holding

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

By analyzing existing cross correlation between Multistack International and Nuvve Holding Corp, you can compare the effects of market volatilities on Multistack International and Nuvve Holding 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 Multistack International with a short position of Nuvve Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multistack International and Nuvve Holding.

Diversification Opportunities for Multistack International and Nuvve Holding

-0.36

Correlation Coefficient

Multistack International  Nuvve Holding

Very good diversification

The 3 months correlation between Multistack and Nuvve is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Multistack International and Nuvve Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuvve Holding Corp and Multistack International 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 Multistack International are associated (or correlated) with Nuvve Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuvve Holding Corp has no effect on the direction of Multistack International i.e., Multistack International and Nuvve Holding go up and down completely randomly.

Pair Corralation between Multistack International and Nuvve Holding

Assuming the 90 days trading horizon Multistack International is expected to generate 10.97 times more return on investment than Nuvve Holding. However, Multistack International is 10.97 times more volatile than Nuvve Holding Corp. It trades about 0.1 of its potential returns per unit of risk. Nuvve Holding Corp is currently generating about -0.06 per unit of risk. If you would invest  1.00  in Multistack International on October 15, 2024 and sell it today you would lose (0.40) from holding Multistack International or give up 40.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.02%
Values	Daily Returns

Multistack International  vs.  Nuvve Holding Corp

Multistack International

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Multistack International are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain forward indicators, Multistack International unveiled solid returns over the last few months and may actually be approaching a breakup point.

Nuvve Holding Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nuvve Holding Corp 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 rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Multistack International and Nuvve Holding

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

The idea behind Multistack International and Nuvve Holding Corp 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.