Correlation Between Nuwellis and ZEN Graphene

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

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

Diversification Opportunities for Nuwellis and ZEN Graphene

0.54

Correlation Coefficient

Nuwellis  ZEN Graphene

Very weak diversification

The 3 months correlation between Nuwellis and ZEN is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Nuwellis and ZEN Graphene Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZEN Graphene Solutions and Nuwellis 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 Nuwellis are associated (or correlated) with ZEN Graphene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZEN Graphene Solutions has no effect on the direction of Nuwellis i.e., Nuwellis and ZEN Graphene go up and down completely randomly.

Pair Corralation between Nuwellis and ZEN Graphene

Given the investment horizon of 90 days Nuwellis is expected to generate 1.13 times more return on investment than ZEN Graphene. However, Nuwellis is 1.13 times more volatile than ZEN Graphene Solutions. It trades about 0.02 of its potential returns per unit of risk. ZEN Graphene Solutions is currently generating about -0.07 per unit of risk. If you would invest  133.00  in Nuwellis on November 28, 2024 and sell it today you would lose (1.00) from holding Nuwellis or give up 0.75% of portfolio value over 90 days.

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

Nuwellis  vs.  ZEN Graphene Solutions

Nuwellis

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nuwellis are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Nuwellis may actually be approaching a critical reversion point that can send shares even higher in March 2025.

ZEN Graphene Solutions

Risk-Adjusted Performance

Very Weak

Over the last 90 days ZEN Graphene Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in March 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Nuwellis and ZEN Graphene

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

The idea behind Nuwellis and ZEN Graphene Solutions 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.