Correlation Between Nitro Games and Upsales Technology

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

By analyzing existing cross correlation between Nitro Games Oyj and Upsales Technology AB, you can compare the effects of market volatilities on Nitro Games and Upsales Technology 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 Nitro Games with a short position of Upsales Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nitro Games and Upsales Technology.

Diversification Opportunities for Nitro Games and Upsales Technology

0.02

Correlation Coefficient

Nitro Games  Upsales Technology

Significant diversification

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

Pair Corralation between Nitro Games and Upsales Technology

Assuming the 90 days trading horizon Nitro Games Oyj is expected to generate 1.36 times more return on investment than Upsales Technology. However, Nitro Games is 1.36 times more volatile than Upsales Technology AB. It trades about 0.15 of its potential returns per unit of risk. Upsales Technology AB is currently generating about -0.04 per unit of risk. If you would invest  238.00  in Nitro Games Oyj on September 1, 2024 and sell it today you would earn a total of  28.00  from holding Nitro Games Oyj or generate 11.76% return on investment over 90 days.

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

Nitro Games Oyj  vs.  Upsales Technology AB

Nitro Games Oyj

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nitro Games Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Nitro Games is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Upsales Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Upsales Technology AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Nitro Games and Upsales Technology

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

The idea behind Nitro Games Oyj and Upsales Technology AB 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.