Correlation Between Nasdaq and DAmico International

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

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

Diversification Opportunities for Nasdaq and DAmico International

0.12

Correlation Coefficient

Nasdaq  DAmico International

Average diversification

The 3 months correlation between Nasdaq and DAmico is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and dAmico International Shipping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on dAmico International 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 DAmico International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of dAmico International has no effect on the direction of Nasdaq i.e., Nasdaq and DAmico International go up and down completely randomly.

Pair Corralation between Nasdaq and DAmico International

Given the investment horizon of 90 days Nasdaq Inc is expected to under-perform the DAmico International. But the stock apears to be less risky and, when comparing its historical volatility, Nasdaq Inc is 1.59 times less risky than DAmico International. The stock trades about -0.01 of its potential returns per unit of risk. The dAmico International Shipping is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  407.00  in dAmico International Shipping on December 26, 2024 and sell it today you would earn a total of  3.00  from holding dAmico International Shipping or generate 0.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Nasdaq Inc  vs.  dAmico International Shipping

Nasdaq Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nasdaq Inc has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

dAmico International

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in dAmico International Shipping are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, DAmico International 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 DAmico International

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

The idea behind Nasdaq Inc and dAmico International Shipping 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.