Correlation Between Network 1 and Conduent

Can any of the company-specific risk be diversified away by investing in both Network 1 and Conduent 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 Network 1 and Conduent into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Network 1 Technologies and Conduent, you can compare the effects of market volatilities on Network 1 and Conduent 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 Network 1 with a short position of Conduent. Check out your portfolio center. Please also check ongoing floating volatility patterns of Network 1 and Conduent.

Diversification Opportunities for Network 1 and Conduent

-0.12

Correlation Coefficient

Network 1  Conduent

Good diversification

The 3 months correlation between Network and Conduent is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Network 1 Technologies and Conduent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Conduent and Network 1 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 Network 1 Technologies are associated (or correlated) with Conduent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Conduent has no effect on the direction of Network 1 i.e., Network 1 and Conduent go up and down completely randomly.

Pair Corralation between Network 1 and Conduent

Given the investment horizon of 90 days Network 1 Technologies is expected to generate 1.15 times more return on investment than Conduent. However, Network 1 is 1.15 times more volatile than Conduent. It trades about 0.21 of its potential returns per unit of risk. Conduent is currently generating about -0.24 per unit of risk. If you would invest  128.00  in Network 1 Technologies on October 15, 2024 and sell it today you would earn a total of  14.00  from holding Network 1 Technologies or generate 10.94% return on investment over 90 days.

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

Network 1 Technologies  vs.  Conduent

Network 1 Technologies

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Network 1 Technologies are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting forward indicators, Network 1 reported solid returns over the last few months and may actually be approaching a breakup point.

Conduent

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Conduent has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Conduent is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Network 1 and Conduent

The main advantage of trading using opposite Network 1 and Conduent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Network 1 position performs unexpectedly, Conduent 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 Conduent will offset losses from the drop in Conduent's long position.

The idea behind Network 1 Technologies and Conduent 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.