Correlation Between Nasdaq and HANSOH PHARMAC

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

By analyzing existing cross correlation between Nasdaq Inc and HANSOH PHARMAC HD 00001, you can compare the effects of market volatilities on Nasdaq and HANSOH PHARMAC 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 Nasdaq with a short position of HANSOH PHARMAC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and HANSOH PHARMAC.

Diversification Opportunities for Nasdaq and HANSOH PHARMAC

-0.51

Correlation Coefficient

Nasdaq  HANSOH PHARMAC

Excellent diversification

The 3 months correlation between Nasdaq and HANSOH is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and HANSOH PHARMAC HD 00001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HANSOH PHARMAC HD and Nasdaq 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 Nasdaq Inc are associated (or correlated) with HANSOH PHARMAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HANSOH PHARMAC HD has no effect on the direction of Nasdaq i.e., Nasdaq and HANSOH PHARMAC go up and down completely randomly.

Pair Corralation between Nasdaq and HANSOH PHARMAC

Given the investment horizon of 90 days Nasdaq Inc is expected to under-perform the HANSOH PHARMAC. But the stock apears to be less risky and, when comparing its historical volatility, Nasdaq Inc is 3.63 times less risky than HANSOH PHARMAC. The stock trades about -0.22 of its potential returns per unit of risk. The HANSOH PHARMAC HD 00001 is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  218.00  in HANSOH PHARMAC HD 00001 on September 24, 2024 and sell it today you would lose (2.00) from holding HANSOH PHARMAC HD 00001 or give up 0.92% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Nasdaq Inc  vs.  HANSOH PHARMAC HD 00001

Nasdaq Inc

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq Inc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Nasdaq is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

HANSOH PHARMAC HD

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in HANSOH PHARMAC HD 00001 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, HANSOH PHARMAC is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Nasdaq and HANSOH PHARMAC

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

The idea behind Nasdaq Inc and HANSOH PHARMAC HD 00001 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.