Correlation Between Nasdaq and Roo Hsing

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

By analyzing existing cross correlation between Nasdaq Inc and Roo Hsing Co, you can compare the effects of market volatilities on Nasdaq and Roo Hsing 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 Roo Hsing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and Roo Hsing.

Diversification Opportunities for Nasdaq and Roo Hsing

0.39

Correlation Coefficient

Nasdaq  Roo Hsing

Weak diversification

The 3 months correlation between Nasdaq and Roo is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and Roo Hsing Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roo Hsing 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 Roo Hsing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roo Hsing has no effect on the direction of Nasdaq i.e., Nasdaq and Roo Hsing go up and down completely randomly.

Pair Corralation between Nasdaq and Roo Hsing

Given the investment horizon of 90 days Nasdaq is expected to generate 15.0 times less return on investment than Roo Hsing. But when comparing it to its historical volatility, Nasdaq Inc is 1.34 times less risky than Roo Hsing. It trades about 0.01 of its potential returns per unit of risk. Roo Hsing Co is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  311.00  in Roo Hsing Co on September 19, 2024 and sell it today you would earn a total of  8.00  from holding Roo Hsing Co or generate 2.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	91.3%
Values	Daily Returns

Nasdaq Inc  vs.  Roo Hsing Co

Nasdaq Inc

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq Inc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Nasdaq may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Roo Hsing

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Roo Hsing Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Roo Hsing is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Nasdaq and Roo Hsing

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

The idea behind Nasdaq Inc and Roo Hsing Co 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.