Correlation Between Nrgene Technologies and B Communications

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

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

Diversification Opportunities for Nrgene Technologies and B Communications

-0.14

Correlation Coefficient

Nrgene Technologies  B Communications

Good diversification

The 3 months correlation between Nrgene and BCOM is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Nrgene Technologies and B Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on B Communications and Nrgene Technologies 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 Nrgene Technologies are associated (or correlated) with B Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of B Communications has no effect on the direction of Nrgene Technologies i.e., Nrgene Technologies and B Communications go up and down completely randomly.

Pair Corralation between Nrgene Technologies and B Communications

Assuming the 90 days trading horizon Nrgene Technologies is expected to generate 2.15 times more return on investment than B Communications. However, Nrgene Technologies is 2.15 times more volatile than B Communications. It trades about 0.1 of its potential returns per unit of risk. B Communications is currently generating about 0.19 per unit of risk. If you would invest  29,520  in Nrgene Technologies on October 12, 2024 and sell it today you would earn a total of  2,120  from holding Nrgene Technologies or generate 7.18% return on investment over 90 days.

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

Nrgene Technologies  vs.  B Communications

Nrgene Technologies

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nrgene Technologies are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Nrgene Technologies is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

B Communications

Risk-Adjusted Performance

28 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in B Communications are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, B Communications sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nrgene Technologies and B Communications

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

The idea behind Nrgene Technologies and B Communications 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.