Correlation Between Nasdaq and Aztec Minerals

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

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

Diversification Opportunities for Nasdaq and Aztec Minerals

-0.02

Correlation Coefficient

Nasdaq  Aztec Minerals

Good diversification

The 3 months correlation between Nasdaq and Aztec is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and Aztec Minerals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aztec Minerals Corp 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 Aztec Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aztec Minerals Corp has no effect on the direction of Nasdaq i.e., Nasdaq and Aztec Minerals go up and down completely randomly.

Pair Corralation between Nasdaq and Aztec Minerals

Given the investment horizon of 90 days Nasdaq Inc is expected to generate 0.18 times more return on investment than Aztec Minerals. However, Nasdaq Inc is 5.58 times less risky than Aztec Minerals. It trades about -0.13 of its potential returns per unit of risk. Aztec Minerals Corp is currently generating about -0.05 per unit of risk. If you would invest  8,128  in Nasdaq Inc on September 25, 2024 and sell it today you would lose (236.00) from holding Nasdaq Inc or give up 2.9% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Nasdaq Inc  vs.  Aztec Minerals Corp

Nasdaq Inc

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq Inc are ranked lower than 10 (%) 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.

Aztec Minerals Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Aztec Minerals Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Aztec Minerals showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nasdaq and Aztec Minerals

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

The idea behind Nasdaq Inc and Aztec Minerals 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.