Correlation Between Nutex Health and Cogstate

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

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

Diversification Opportunities for Nutex Health and Cogstate

0.58

Correlation Coefficient

Nutex Health  Cogstate

Very weak diversification

The 3 months correlation between Nutex and Cogstate is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Nutex Health and Cogstate Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogstate Limited and Nutex Health 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 Nutex Health are associated (or correlated) with Cogstate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cogstate Limited has no effect on the direction of Nutex Health i.e., Nutex Health and Cogstate go up and down completely randomly.

Pair Corralation between Nutex Health and Cogstate

Given the investment horizon of 90 days Nutex Health is expected to under-perform the Cogstate. In addition to that, Nutex Health is 1.24 times more volatile than Cogstate Limited. It trades about -0.1 of its total potential returns per unit of risk. Cogstate Limited is currently generating about -0.09 per unit of volatility. If you would invest  68.00  in Cogstate Limited on October 7, 2024 and sell it today you would lose (5.00) from holding Cogstate Limited or give up 7.35% of portfolio value over 90 days.

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

Nutex Health  vs.  Cogstate Limited

Nutex Health

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nutex Health are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Nutex Health showed solid returns over the last few months and may actually be approaching a breakup point.

Cogstate Limited

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cogstate Limited are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Cogstate may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Nutex Health and Cogstate

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

The idea behind Nutex Health and Cogstate Limited 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.