Correlation Between Nano One and Nanophase Technol

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

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

Diversification Opportunities for Nano One and Nanophase Technol

0.51

Correlation Coefficient

Nano One  Nanophase Technol

Very weak diversification

The 3 months correlation between Nano and Nanophase is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Nano One Materials and Nanophase Technol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanophase Technol and Nano One 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 Nano One Materials are associated (or correlated) with Nanophase Technol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanophase Technol has no effect on the direction of Nano One i.e., Nano One and Nanophase Technol go up and down completely randomly.

Pair Corralation between Nano One and Nanophase Technol

If you would invest  55.00  in Nano One Materials on September 4, 2024 and sell it today you would earn a total of  2.00  from holding Nano One Materials or generate 3.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	1.56%
Values	Daily Returns

Nano One Materials  vs.  Nanophase Technol

Nano One Materials

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nano One Materials are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, Nano One reported solid returns over the last few months and may actually be approaching a breakup point.

Nanophase Technol

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nanophase Technol has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Nanophase Technol is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Nano One and Nanophase Technol

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

The idea behind Nano One Materials and Nanophase Technol 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.