Correlation Between Nasdaq and Saga Furs

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

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

Diversification Opportunities for Nasdaq and Saga Furs

-0.39

Correlation Coefficient

Nasdaq  Saga Furs

Very good diversification

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

Pair Corralation between Nasdaq and Saga Furs

Given the investment horizon of 90 days Nasdaq Inc is expected to generate 0.51 times more return on investment than Saga Furs. However, Nasdaq Inc is 1.98 times less risky than Saga Furs. It trades about 0.1 of its potential returns per unit of risk. Saga Furs Oyj is currently generating about -0.05 per unit of risk. If you would invest  7,270  in Nasdaq Inc on October 3, 2024 and sell it today you would earn a total of  470.00  from holding Nasdaq Inc or generate 6.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.77%
Values	Daily Returns

Nasdaq Inc  vs.  Saga Furs Oyj

Nasdaq Inc

Risk-Adjusted Performance

7 of 100

OK

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 unsteady basic indicators, Nasdaq may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Saga Furs Oyj

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Saga Furs Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's technical indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Nasdaq and Saga Furs

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

The idea behind Nasdaq Inc and Saga Furs Oyj 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.