Correlation Between Nano and Ontology

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

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

Diversification Opportunities for Nano and Ontology

0.77

Correlation Coefficient

Nano  Ontology

Poor diversification

The 3 months correlation between Nano and Ontology is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Nano and Ontology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ontology and Nano 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 are associated (or correlated) with Ontology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ontology has no effect on the direction of Nano i.e., Nano and Ontology go up and down completely randomly.

Pair Corralation between Nano and Ontology

Assuming the 90 days trading horizon Nano is expected to generate 1.3 times more return on investment than Ontology. However, Nano is 1.3 times more volatile than Ontology. It trades about 0.01 of its potential returns per unit of risk. Ontology is currently generating about -0.05 per unit of risk. If you would invest  134.00  in Nano on November 27, 2024 and sell it today you would lose (27.00) from holding Nano or give up 20.15% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Nano  vs.  Ontology

Nano

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nano has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather unsteady fundamental indicators, Nano may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Ontology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ontology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's basic indicators remain rather sound which may send shares a bit higher in March 2025. The latest tumult may also be a sign of longer-term up-swing for Ontology shareholders.

Pair Trading with Nano and Ontology

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

The idea behind Nano and Ontology 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.