Correlation Between Now Corp and IRemit

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

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

Diversification Opportunities for Now Corp and IRemit

0.53

Correlation Coefficient

Now Corp  IRemit

Very weak diversification

The 3 months correlation between Now and IRemit is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Now Corp and IRemit Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IRemit Inc and Now Corp 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 Now Corp are associated (or correlated) with IRemit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IRemit Inc has no effect on the direction of Now Corp i.e., Now Corp and IRemit go up and down completely randomly.

Pair Corralation between Now Corp and IRemit

Assuming the 90 days trading horizon Now Corp is expected to under-perform the IRemit. But the stock apears to be less risky and, when comparing its historical volatility, Now Corp is 2.48 times less risky than IRemit. The stock trades about -0.04 of its potential returns per unit of risk. The IRemit Inc is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  24.00  in IRemit Inc on December 19, 2024 and sell it today you would lose (1.00) from holding IRemit Inc or give up 4.17% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	30.51%
Values	Daily Returns

Now Corp  vs.  IRemit Inc

Now Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Now Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

IRemit Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in IRemit Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, IRemit exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Now Corp and IRemit

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

The idea behind Now Corp and IRemit Inc 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.