Correlation Between NOVA VISION and INAQ Old

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

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

Diversification Opportunities for NOVA VISION and INAQ Old

0.34

Correlation Coefficient

NOVA VISION  INAQ Old

Weak diversification

The 3 months correlation between NOVA and INAQ is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding NOVA VISION ACQUISITION and INAQ Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INAQ Old and NOVA VISION 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 NOVA VISION ACQUISITION are associated (or correlated) with INAQ Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INAQ Old has no effect on the direction of NOVA VISION i.e., NOVA VISION and INAQ Old go up and down completely randomly.

Pair Corralation between NOVA VISION and INAQ Old

Given the investment horizon of 90 days NOVA VISION ACQUISITION is expected to generate 3.86 times more return on investment than INAQ Old. However, NOVA VISION is 3.86 times more volatile than INAQ Old. It trades about 0.05 of its potential returns per unit of risk. INAQ Old is currently generating about 0.01 per unit of risk. If you would invest  1,062  in NOVA VISION ACQUISITION on October 27, 2024 and sell it today you would earn a total of  2,638  from holding NOVA VISION ACQUISITION or generate 248.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	97.65%
Values	Daily Returns

NOVA VISION ACQUISITION  vs.  INAQ Old

NOVA VISION ACQUISITION

Risk-Adjusted Performance

0 of 100

Very Weak

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

INAQ Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INAQ Old has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest abnormal performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with NOVA VISION and INAQ Old

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

The idea behind NOVA VISION ACQUISITION and INAQ Old 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.