Correlation Between Microvision and US Nuclear

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

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

Diversification Opportunities for Microvision and US Nuclear

-0.31

Correlation Coefficient

Microvision  US Nuclear

Very good diversification

The 3 months correlation between Microvision and UCLE is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Microvision and US Nuclear Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Nuclear Corp and Microvision 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 Microvision are associated (or correlated) with US Nuclear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Nuclear Corp has no effect on the direction of Microvision i.e., Microvision and US Nuclear go up and down completely randomly.

Pair Corralation between Microvision and US Nuclear

Given the investment horizon of 90 days Microvision is expected to under-perform the US Nuclear. But the stock apears to be less risky and, when comparing its historical volatility, Microvision is 12.14 times less risky than US Nuclear. The stock trades about -0.05 of its potential returns per unit of risk. The US Nuclear Corp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  15.00  in US Nuclear Corp on September 22, 2024 and sell it today you would lose (7.00) from holding US Nuclear Corp or give up 46.67% of portfolio value over 90 days.

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

Microvision  vs.  US Nuclear Corp

Microvision

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Microvision has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward indicators, Microvision is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

US Nuclear Corp

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in US Nuclear Corp are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady essential indicators, US Nuclear exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Microvision and US Nuclear

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

The idea behind Microvision and US Nuclear 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.