Correlation Between Numinus Wellness and Bombardier

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Can any of the company-specific risk be diversified away by investing in both Numinus Wellness and Bombardier 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 Numinus Wellness and Bombardier into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Numinus Wellness and Bombardier, you can compare the effects of market volatilities on Numinus Wellness and Bombardier 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 Numinus Wellness with a short position of Bombardier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Numinus Wellness and Bombardier.

Diversification Opportunities for Numinus Wellness and Bombardier

NuminusBombardierDiversified AwayNuminusBombardierDiversified Away100%
-0.41
  Correlation Coefficient

Very good diversification

The 3 months correlation between Numinus and Bombardier is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Numinus Wellness and Bombardier in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bombardier and Numinus Wellness 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 Numinus Wellness are associated (or correlated) with Bombardier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bombardier has no effect on the direction of Numinus Wellness i.e., Numinus Wellness and Bombardier go up and down completely randomly.

Pair Corralation between Numinus Wellness and Bombardier

If you would invest  5.00  in Numinus Wellness on December 1, 2024 and sell it today you would earn a total of  0.00  from holding Numinus Wellness or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Numinus Wellness  vs.  Bombardier

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -20-1001020
JavaScript chart by amCharts 3.21.15NUMI BBD-B
       Timeline  
Numinus Wellness 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Numinus Wellness are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Numinus Wellness displayed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15JanFebFebMar0.0350.040.0450.050.055
Bombardier 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Bombardier has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
JavaScript chart by amCharts 3.21.15JanFebFeb7580859095100105

Numinus Wellness and Bombardier Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-29.51-22.1-14.69-7.28-0.127.3915.0322.6730.3137.95 0.010.020.030.04
JavaScript chart by amCharts 3.21.15NUMI BBD-B
       Returns  

Pair Trading with Numinus Wellness and Bombardier

The main advantage of trading using opposite Numinus Wellness and Bombardier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Numinus Wellness position performs unexpectedly, Bombardier 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 Bombardier will offset losses from the drop in Bombardier's long position.
The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against Numinus Wellness as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. Numinus Wellness' systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, Numinus Wellness' unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to Numinus Wellness.
The idea behind Numinus Wellness and Bombardier 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.

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