Correlation Between NUZE Old and Lever Global

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

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

Diversification Opportunities for NUZE Old and Lever Global

-0.52

Correlation Coefficient

NUZE Old  Lever Global

Excellent diversification

The 3 months correlation between NUZE and Lever is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding NUZE Old and Lever Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lever Global and NUZE Old 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 NUZE Old are associated (or correlated) with Lever Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lever Global has no effect on the direction of NUZE Old i.e., NUZE Old and Lever Global go up and down completely randomly.

Pair Corralation between NUZE Old and Lever Global

Given the investment horizon of 90 days NUZE Old is expected to generate 3.76 times more return on investment than Lever Global. However, NUZE Old is 3.76 times more volatile than Lever Global. It trades about 0.03 of its potential returns per unit of risk. Lever Global is currently generating about 0.09 per unit of risk. If you would invest  1,142  in NUZE Old on October 24, 2024 and sell it today you would lose (1,043) from holding NUZE Old or give up 91.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	67.57%
Values	Daily Returns

NUZE Old  vs.  Lever Global

NUZE Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NUZE Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Lever Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lever Global has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, Lever Global is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with NUZE Old and Lever Global

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

The idea behind NUZE Old and Lever Global 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.