Correlation Between Nelnet and Global Star

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

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

Diversification Opportunities for Nelnet and Global Star

-0.39

Correlation Coefficient

Nelnet  Global Star

Very good diversification

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

Pair Corralation between Nelnet and Global Star

Considering the 90-day investment horizon Nelnet Inc is expected to under-perform the Global Star. But the stock apears to be less risky and, when comparing its historical volatility, Nelnet Inc is 12.08 times less risky than Global Star. The stock trades about -0.01 of its potential returns per unit of risk. The Global Star Acquisition, is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  1.12  in Global Star Acquisition, on October 25, 2024 and sell it today you would earn a total of  2.88  from holding Global Star Acquisition, or generate 257.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	62.71%
Values	Daily Returns

Nelnet Inc  vs.  Global Star Acquisition,

Nelnet Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nelnet Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Nelnet is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Global Star Acquisition,

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Global Star Acquisition, are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Global Star showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nelnet and Global Star

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

The idea behind Nelnet Inc and Global Star Acquisition, 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 Global Correlations module to find global opportunities by holding instruments from different markets.