Correlation Between Nasdaq and PATRIOT BATTERY

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

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

Diversification Opportunities for Nasdaq and PATRIOT BATTERY

-0.88

Correlation Coefficient

Nasdaq  PATRIOT BATTERY

Pay attention - limited upside

The 3 months correlation between Nasdaq and PATRIOT is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and PATRIOT BATTERY METINC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PATRIOT BATTERY METINC 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 PATRIOT BATTERY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PATRIOT BATTERY METINC has no effect on the direction of Nasdaq i.e., Nasdaq and PATRIOT BATTERY go up and down completely randomly.

Pair Corralation between Nasdaq and PATRIOT BATTERY

Given the investment horizon of 90 days Nasdaq is expected to generate 26.6 times less return on investment than PATRIOT BATTERY. But when comparing it to its historical volatility, Nasdaq Inc is 7.67 times less risky than PATRIOT BATTERY. It trades about 0.05 of its potential returns per unit of risk. PATRIOT BATTERY METINC is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  165.00  in PATRIOT BATTERY METINC on September 17, 2024 and sell it today you would earn a total of  31.00  from holding PATRIOT BATTERY METINC or generate 18.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Nasdaq Inc  vs.  PATRIOT BATTERY METINC

Nasdaq Inc

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq Inc are ranked lower than 12 (%) 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.

PATRIOT BATTERY METINC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PATRIOT BATTERY METINC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Nasdaq and PATRIOT BATTERY

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

The idea behind Nasdaq Inc and PATRIOT BATTERY METINC 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.