Correlation Between NanoTech Gaming and Lord Global

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

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

Diversification Opportunities for NanoTech Gaming and Lord Global

1.0

Correlation Coefficient

NanoTech Gaming  Lord Global

No risk reduction

The 3 months correlation between NanoTech and Lord is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding NanoTech Gaming and Lord Global Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Global Corp and NanoTech Gaming 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 NanoTech Gaming are associated (or correlated) with Lord Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lord Global Corp has no effect on the direction of NanoTech Gaming i.e., NanoTech Gaming and Lord Global go up and down completely randomly.

Pair Corralation between NanoTech Gaming and Lord Global

Given the investment horizon of 90 days NanoTech Gaming is expected to generate 1.71 times less return on investment than Lord Global. But when comparing it to its historical volatility, NanoTech Gaming is 1.21 times less risky than Lord Global. It trades about 0.04 of its potential returns per unit of risk. Lord Global Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  0.01  in Lord Global Corp on October 10, 2024 and sell it today you would earn a total of  0.01  from holding Lord Global Corp or generate 100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	69.42%
Values	Daily Returns

NanoTech Gaming  vs.  Lord Global Corp

NanoTech Gaming

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NanoTech Gaming has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, NanoTech Gaming is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Lord Global Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with NanoTech Gaming and Lord Global

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

The idea behind NanoTech Gaming and Lord Global Corp 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.