Correlation Between Nano Labs and Lam Research

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

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

Diversification Opportunities for Nano Labs and Lam Research

-0.25

Correlation Coefficient

Nano Labs  Lam Research

Very good diversification

The 3 months correlation between Nano and Lam is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Nano Labs and Lam Research Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lam Research Corp and Nano Labs 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 Nano Labs are associated (or correlated) with Lam Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lam Research Corp has no effect on the direction of Nano Labs i.e., Nano Labs and Lam Research go up and down completely randomly.

Pair Corralation between Nano Labs and Lam Research

Allowing for the 90-day total investment horizon Nano Labs is expected to under-perform the Lam Research. In addition to that, Nano Labs is 2.39 times more volatile than Lam Research Corp. It trades about -0.13 of its total potential returns per unit of risk. Lam Research Corp is currently generating about 0.05 per unit of volatility. If you would invest  7,361  in Lam Research Corp on December 24, 2024 and sell it today you would earn a total of  438.00  from holding Lam Research Corp or generate 5.95% return on investment over 90 days.

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

Nano Labs  vs.  Lam Research Corp

Nano Labs

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nano Labs has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Etf's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the ETF investors.

Lam Research Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lam Research Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting fundamental indicators, Lam Research may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Nano Labs and Lam Research

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

The idea behind Nano Labs and Lam Research 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.