Correlation Between Neptune Digital and SPENN Technology

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

By analyzing existing cross correlation between Neptune Digital Assets and SPENN Technology AS, you can compare the effects of market volatilities on Neptune Digital and SPENN Technology 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 Neptune Digital with a short position of SPENN Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neptune Digital and SPENN Technology.

Diversification Opportunities for Neptune Digital and SPENN Technology

0.0

Correlation Coefficient

Neptune Digital  SPENN Technology

Pay attention - limited upside

The 3 months correlation between Neptune and SPENN is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Neptune Digital Assets and SPENN Technology AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPENN Technology and Neptune Digital 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 Neptune Digital Assets are associated (or correlated) with SPENN Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPENN Technology has no effect on the direction of Neptune Digital i.e., Neptune Digital and SPENN Technology go up and down completely randomly.

Pair Corralation between Neptune Digital and SPENN Technology

Assuming the 90 days horizon Neptune Digital Assets is expected to generate 3.4 times more return on investment than SPENN Technology. However, Neptune Digital is 3.4 times more volatile than SPENN Technology AS. It trades about 0.08 of its potential returns per unit of risk. SPENN Technology AS is currently generating about -0.06 per unit of risk. If you would invest  25.00  in Neptune Digital Assets on September 12, 2024 and sell it today you would earn a total of  55.00  from holding Neptune Digital Assets or generate 220.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Neptune Digital Assets  vs.  SPENN Technology AS

Neptune Digital Assets

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Neptune Digital Assets are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Neptune Digital reported solid returns over the last few months and may actually be approaching a breakup point.

SPENN Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SPENN Technology AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, SPENN Technology is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Neptune Digital and SPENN Technology

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

The idea behind Neptune Digital Assets and SPENN Technology AS 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.

Check out your portfolio center.

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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.