Correlation Between Nexoptic Technology and International Business

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

By analyzing existing cross correlation between Nexoptic Technology Corp and International Business Machines, you can compare the effects of market volatilities on Nexoptic Technology and International Business 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 Nexoptic Technology with a short position of International Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexoptic Technology and International Business.

Diversification Opportunities for Nexoptic Technology and International Business

-0.55

Correlation Coefficient

Nexoptic Technology  International Business

Excellent diversification

The 3 months correlation between Nexoptic and International is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Nexoptic Technology Corp and International Business Machine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Business and Nexoptic Technology 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 Nexoptic Technology Corp are associated (or correlated) with International Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Business has no effect on the direction of Nexoptic Technology i.e., Nexoptic Technology and International Business go up and down completely randomly.

Pair Corralation between Nexoptic Technology and International Business

Assuming the 90 days horizon Nexoptic Technology Corp is expected to generate 9.02 times more return on investment than International Business. However, Nexoptic Technology is 9.02 times more volatile than International Business Machines. It trades about 0.07 of its potential returns per unit of risk. International Business Machines is currently generating about 0.08 per unit of risk. If you would invest  2.00  in Nexoptic Technology Corp on December 30, 2024 and sell it today you would lose (0.50) from holding Nexoptic Technology Corp or give up 25.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Nexoptic Technology Corp  vs.  International Business Machine

Nexoptic Technology Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Nexoptic Technology Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Nexoptic Technology showed solid returns over the last few months and may actually be approaching a breakup point.

International Business

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in International Business Machines are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, International Business may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Nexoptic Technology and International Business

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

The idea behind Nexoptic Technology Corp and International Business Machines 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.