Correlation Between NR Old and Core Main

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

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

Diversification Opportunities for NR Old and Core Main

0.0

Correlation Coefficient

NR Old  Core Main

Pay attention - limited upside

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

Pair Corralation between NR Old and Core Main

If you would invest (100.00) in NR Old on December 27, 2024 and sell it today you would earn a total of  100.00  from holding NR Old or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

NR Old  vs.  Core Main

NR Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days NR Old has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, NR Old is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Core Main

Risk-Adjusted Performance

Very Weak

Over the last 90 days Core Main has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Core Main is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with NR Old and Core Main

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

The idea behind NR Old and Core Main 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.