Correlation Between Nel ASA and Intevac

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

By analyzing existing cross correlation between Nel ASA and Intevac, you can compare the effects of market volatilities on Nel ASA and Intevac 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 Nel ASA with a short position of Intevac. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nel ASA and Intevac.

Diversification Opportunities for Nel ASA and Intevac

-0.65

Correlation Coefficient

Nel ASA  Intevac

Excellent diversification

The 3 months correlation between Nel and Intevac is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Nel ASA and Intevac in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intevac and Nel ASA 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 Nel ASA are associated (or correlated) with Intevac. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intevac has no effect on the direction of Nel ASA i.e., Nel ASA and Intevac go up and down completely randomly.

Pair Corralation between Nel ASA and Intevac

Assuming the 90 days horizon Nel ASA is expected to under-perform the Intevac. In addition to that, Nel ASA is 1.42 times more volatile than Intevac. It trades about -0.02 of its total potential returns per unit of risk. Intevac is currently generating about 0.18 per unit of volatility. If you would invest  268.00  in Intevac on December 1, 2024 and sell it today you would earn a total of  134.00  from holding Intevac or generate 50.0% return on investment over 90 days.

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

Nel ASA  vs.  Intevac

Nel ASA

Risk-Adjusted Performance

Very Weak

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

Intevac

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Intevac are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Intevac exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nel ASA and Intevac

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

The idea behind Nel ASA and Intevac 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.