Correlation Between NBI Unconstrained and Ether Fund

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

By analyzing existing cross correlation between NBI Unconstrained Fixed and Ether Fund, you can compare the effects of market volatilities on NBI Unconstrained and Ether Fund 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 NBI Unconstrained with a short position of Ether Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of NBI Unconstrained and Ether Fund.

Diversification Opportunities for NBI Unconstrained and Ether Fund

0.16

Correlation Coefficient

NBI Unconstrained  Ether Fund

Average diversification

The 3 months correlation between NBI and Ether is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding NBI Unconstrained Fixed and Ether Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ether Fund and NBI Unconstrained 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 NBI Unconstrained Fixed are associated (or correlated) with Ether Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ether Fund has no effect on the direction of NBI Unconstrained i.e., NBI Unconstrained and Ether Fund go up and down completely randomly.

Pair Corralation between NBI Unconstrained and Ether Fund

Assuming the 90 days trading horizon NBI Unconstrained is expected to generate 18.61 times less return on investment than Ether Fund. But when comparing it to its historical volatility, NBI Unconstrained Fixed is 8.46 times less risky than Ether Fund. It trades about 0.03 of its potential returns per unit of risk. Ether Fund is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  3,240  in Ether Fund on October 7, 2024 and sell it today you would earn a total of  4,810  from holding Ether Fund or generate 148.46% return on investment over 90 days.

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

NBI Unconstrained Fixed  vs.  Ether Fund

NBI Unconstrained Fixed

Risk-Adjusted Performance

0 of 100

Very Weak

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

Ether Fund

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ether Fund are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical indicators, Ether Fund displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NBI Unconstrained and Ether Fund

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

The idea behind NBI Unconstrained Fixed and Ether Fund 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.