Correlation Between Nano Labs and Navitas Semiconductor

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

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

Diversification Opportunities for Nano Labs and Navitas Semiconductor

0.54

Correlation Coefficient

Nano Labs  Navitas Semiconductor

Very weak diversification

The 3 months correlation between Nano and Navitas is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Nano Labs and Navitas Semiconductor Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Navitas Semiconductor 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 Navitas Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Navitas Semiconductor has no effect on the direction of Nano Labs i.e., Nano Labs and Navitas Semiconductor go up and down completely randomly.

Pair Corralation between Nano Labs and Navitas Semiconductor

Allowing for the 90-day total investment horizon Nano Labs is expected to generate 2.42 times more return on investment than Navitas Semiconductor. However, Nano Labs is 2.42 times more volatile than Navitas Semiconductor Corp. It trades about 0.04 of its potential returns per unit of risk. Navitas Semiconductor Corp is currently generating about 0.03 per unit of risk. If you would invest  1,280  in Nano Labs on September 26, 2024 and sell it today you would lose (381.00) from holding Nano Labs or give up 29.77% of portfolio value over 90 days.

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

Nano Labs  vs.  Navitas Semiconductor Corp

Nano Labs

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nano Labs are ranked lower than 8 (%) 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.

Navitas Semiconductor

Risk-Adjusted Performance

10 of 100

OK

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

Pair Trading with Nano Labs and Navitas Semiconductor

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

The idea behind Nano Labs and Navitas Semiconductor 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.